Cost Accounting

Financial Accounting

Financial accounting is the area of accounting concerned with external parties interested in the business firm. Financial statements, for example, are produced for the benefit of the external investors in the business firm. Investors need to be able to review financial statements such as the income statement, the balance sheet, and the statement of cash flows in order to determine whether or not invest in the business firm or remain invested in the company.

Financial statements are also of interest to another group of external individuals and those are the creditors of the firm. Those creditors are the bondholders of the firm or they could be just the debtholders of the firm. Creditors are individuals who have loaned money to the firm and are interested in receiving a return on their investment and, eventually, a return of their principal.

Managerial Accounting

Managerial accounting is the area of accounting associated with gathering and preparing financial information for those inside business organizations such as managers and staff. It can be compared to financial accounting which is concerned with information for external individuals.

Managers use financial information to make better business decisions in their managerial and control roles. Much of this information is private since it is for insiders of the firm instead of public.

They use a variety of forecasting techniques such as variance analysis, risk management, and cost-volume-profit analysis to predict the best forward looking information as possible.

Forensic accounting

Forensic accounting involves court and litigation cases, fraud investigation, claims and dispute resolution, and other areas that involve legal matters. This is one of the popular trends in accounting today.

Forensic accountants are the detectives of the finance world and help investigate fraud and other financial misrepresentation. Forensic Accountants have advanced knowledge of typical fraud schemes and data analysis techniques so that they can perform investigations efficiently and strategically.

Cost Accounting

Sometimes considered as a subset of management accounting, cost accounting refers to the recording, presentation, and analysis of manufacturing costs. Cost accounting is very useful in manufacturing businesses since they have the most complicated costing process.

Cost accountants also analyze actual and standard costs to help managers determine future courses of action regarding the company's operations.

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