Accounting is one of the oldest professions in the world. The goal of this type of work is to record and report business transactions. There is evidence that people began using accountancy over 7,000 years ago; once we began trading with other people it became a necessity. The oldest books in the world are the Indian Vedas and this document contains information about accountancy. In the distant past it is uncertain if there were people employed full time as accountants, but as time passed humans developed bookkeeping and accountancy became a distinct profession.
So What Is Accounting?
Accountancy is a very well known profession and most of us will know somebody who works in this type of employment. Even though it is such a recognised profession though there are still many of us who are unsure about what an accountant actually does. Sure we know that is something to do with business and numbers, but we might not know much more than this. There is also a suspicion within the general public that accounting is dull work and to hear about it would be a bit boring.
Accounting actually involves a number of different elements. The most important of these is bookkeeping. This involves tracking all the funds that passes through the business; money coming in and money going out. As well as the money that a business handles bookkeeping also needs to record assets such as stock and other resources. Not only does bookkeeping need to be effective but it also has to be recorded in such a way that the information is easily understandable. You shouldn’t have to be an accountant to understand the information provided through bookkeeping; this is important because the data will be required by people such as board members and other interested parties.
One of the other important elements of accounting is auditing. The purpose here is to investigate that everything in a company is as it should be and that no fraud is taking place. Not only does an audit involve looking at the books, but it can also mean counting stock to ensure that nothing is missing. Most businesses will perform their own audit checks but they can also be imposed by external agencies; especially if there is the suspicion of any type of criminality.
The Importance of Accounting
Accountancy is viewed as an important part of any business operation. A small business might just hire an accountant when they need to get their books in order, but bigger business will employ their own accountants. Some big companies will have a large team of accountants within their own department. It is impossible to image how the economy could function without the accountancy profession and the reputation that the job has for being dull is underserved. In fact there is forensic accountancy which is used to discover illegal behaviour and this is almost as exciting as CSI – although the action tends to be a lot slower. The good news for those entering the profession is that there always seems to be a high demand and the salary can be quite high.