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By: Uchenna Ani-okoye

The Scope of Accounting

Cost Accounting and Management Accounting

Cost or management accounting is basically a management information system that analyses data in order to provide managerial based information. The responsibility of a management accountant is to present accounting information in a way that is most helpful to managers.

Financial Accounting

Financial accounting is basically a method of reporting financial positions and results of a company. Its primary concerns do not center on providing data that is to be used to improve the running of a business. This is most evident in the context of a published account of a company that’s limited. Public law and accounting standards prescribe that accounts should be produced so that they can be presented to shareholders.

Financial Management

The responsibility of the finance manager is to control financial resources and raise finances. This may include the follow decisions:

- Should the firm decide to raise funds by issue shares of by borrowing from the bank?
- How much money should be paid out as a dividend?
- Should the money use some of its money to purchase new machinery?
- How much credit should customers receive?
- How much discount should customers who pay early receive?

Auditing

The annual accounts of any business should naturally be audited by an individual who is not a part of the company. This will mean that the company members will appoint registered auditors from a fir to investigate all company financial statements and then report as to whether or not they are a true reflection of the company’s results for that year.