The Two Kinds of Accounting
Career Path : Accounting
Bookkeeping is one of the oldest professions in the business world. It began in ancient Mesopotamia, where farmers and herders needed to keep track of their crops and livestock. Their form of bookkeeping relied on the usage of tokens, and this development marked the beginning of an entire industry of professionals who would continue to gain importance as the modern business world evolved.
Today, the world of accountancy is multifold. No business or industry, no matter how large or small, how self-contained or externally divided, can function properly and ethically without the work of accountants. There are two major forms of accounting that are distinct from each other: managerial accounting and financial accounting. When considering a career as an accountant, it is important to obtain a good background education in the principles of both forms before making the decision regarding which kind of account you want to become.
Managerial, or management accounting is an internal form of accounting employed primarily within single businesses and concerned with the growth and development of that business. Its interest is fully absorbed with the costs and profits of a company with minimum regard to external considerations, like shareholders or outside investors. A managerial accountant works closely with a company in terms of decision-making, planning, and assisting in the company’s forward-looking strategies. If you consider yourself more of a team-player within a group of shared interests, cost and managerial accounting is best suited for your career aspirations.
In contrast, financial accounting is a bit wider in scope. Financial accountancy is more of a central mind, tying and sharing financial information together for a large collection of interested parties, like companies, stockholders, banks, and even government agencies. Financial accountants are responsible for measuring and monitoring performances and profits and reporting constant financial feedback to all of the interested users. Unlike the managerial accountant, the financial accountant is less concerned with the day-to-day operations of an individual company. If you have more of a mind for mining data and finding patterns, consider specializing in a career as a financial accountant.
When considering enrolling into an accounting college, choose a program that offers students a generalized education in the early semesters. This allows the student to get a taste of all the various forms of accounting before having to decide upon a specialization. Not only will the student get a basis in both managerial and financial accounting, but also some other accounting specializations that could be pursued, such as taxation, business finance and applied accounting systems. Another important consideration in selecting a program is having good transfer options after the early semesters. A basis in accounting could lead the student to other areas of the business world like business marketing, insurance, administration or financial services.
Obtaining good accounting training, therefore, opens up to the future accountant a wide variety of options in the business world. But for those dedicated to working in the exciting world of number-crunching and financial planning, whether within the family of a single company or as the networking centre of the larger financial world, then management accounting or financial accounting is a great career you can count on.
Visit Mohawk College for more information on accounting courses.