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Accounting is essentially an information system concerned with gathering, recording, analysing and interpreting financial data about the activities of businesses and other organisations. It is concerned with interpreting and communicating this information to managers and others who use it to make business decisions. Accounting can be regarded as 'the language of business', since it forms a part of the language used by business managers, lawyers and economists.
The process of gathering, recording, measuring, analysing and interpreting financial data involves two interrelated activities. The first is 'book-keeping', recording and analysing of business transactions according to a set of prescribed rules and arithmetical procedures. The second is 'accounting', designing book-keeping systems and preparing and interpreting reports, such as annual financial statements, which measure in money terms the wealth of a business at a particular time and its 'performance' over a specific period.
Accounting is a practical activity performed by highly trained accountants who often belong to a professional body such as the South African Institute of Chartered Accountants or the Chartered Institute of Management Accountants. It is also an intellectual discipline concerned with the models, concepts and principles used to measure the wealth and performance of business organisations.
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Last Modified :Wed, 28 Aug 2013 12:24:43 SAST