Branches of Accounting

When a business wants to know its financial position, analyze its cash flow, determine the health of its
operations, or understand its competition, it typically turns to certain branches of accounting. Small- to
medium-sized businesses may use the services of one specialized accountants while big business and
governments may work with an accounting firm that houses multiple finance departments to handle
specific areas of accounting.

Accounting branches use various types of analysis and data to inform management and help the
business make knowledgeable, positive decisions for the company's present and future. In this article,
we explain the different accounting branches and discuss their functions.

What does an accounting branch do?

Accounting branches record business events and transactions, then translate that information and
present it to managers, stakeholders or whoever has a financial interest. The information assists
managers before, during and after projects, and helps stakeholders make business decisions.

Accounting branches follow certain sets of accounting standards put in place by organizations such as
the Financial Accounting Standards Board (FASB) in the US. These standards, known as the general
accepted accounting principles (GAAP), are a set of concepts, conventions, assumptions and principles
followed by accountants. GAAP serves to remove confusion and encourage uniformity and consistency
in accounting practices.

Accounting branches use a variety of accounting practices to monitor and report on economic activity
and company health.

In addition to tracking the movement of money, accounting branches typically serve to:

 Keep and maintain financial records.

 Facilitate decision making.

 Comply with laws and regulations.

 Protect business assets.

 Determine profit and loss.

 Monitor business health through multiple analyses.