|
Practitioners
of accountancy are known as accountants. There are many professional
bodies for accountants throughout the world. Many allow their members
to use titles indicating their membership. Examples are Chartered
Certified Accountant , Chartered Accountant and Certified Public
Accountant .
Accountancy attempts to create accurate financial reports that are useful to managers, regulators, and other stakeholders such as shareholders, creditors, or owners. The day-to-day record keeping involved in this process is known as bookkeeping. At the heart of modern financial accounting is the double-entry bookkeeping system. This system involves making at least two entries for every transaction: a debit in one account, and a corresponding credit in another account. The sum of all debits should always equal the sum of all credits. This provides an easy way to check for errors. This system was first used in medieval Europe, although claims have been made that the system dates back to Ancient Greece. According to critics of standard
accounting practices, it has changed little since. Accounting reform
measures of some kind have been taken in each generation to attempt
to keep bookkeeping relevant to capital assets or production capacity.
However, these have not changed the basic principles, which are
supposed to be independent of economics as such. In recent times,
the divergence of accounting from economic principles has resulted
in controversial reforms to make financial reports more indicative
of economic reality. |