1.1.4 Accounting Profession

The accounting profession can be divided into three broad categories: public accounting, private accounting, and accounting for government and nonprofit organizations.

Public accounting provides accounting services to the public on a compensable foundation base. In the field of public accounting, the accountant can provide service either as an individual or as a member of accounting firms. Most of the accountants working in public accounting firms are qualified as a Certified Public Accountant (CPA). Thus, public accounting firms are also called CPA firms, and they could provide services like auditing, tax agency, management advisory and authentication.

Private accounting is one of the core functions of business. According to the subject and purpose of service, modern accounting can be divided into two main branches: financial accounting and management accounting. Financial accounting is concerned with providing accounting information to shareholders, creditors, and other information users. Based on generally accepted accounting principles(GAAP), it measures and records business transactions and prepares financial statements to convey information. By measuring, analyzing, and reporting financial and non-financial information, management accounting could help managers choose, communicate, and implement appropriate strategies, and then help the company fulfill its development targets.

Accounting for government and nonprofit organizations mainly provides accounting service to government and nonprofit organizations. It has two major activities. One is to check and supervise the implementation of budget for each level of the government and all the non-profit organizations. Another is to identify, measure, and report all the financial incomes and expenditures of government and nonprofit organizations as well as the corresponding result. Accordingly, accounting for government and nonprofit organizations is usually engaged in activities like budget management, administration management, social service, and etc..