Financial accounting

Financial accounting is the heart of any areas in business. It is a process of systematic recording information, which involves analyzing identifying, classifying, and summarizing of business transactions in monetary terms, interpreting and communicating the results to enable them to meet the decision-making needs of parties external to the organization, such as banks, shareholders and creditors. Financial accounting is regulated by law (principles, content), and focused on the economic events of the past, while the statements contain historical data. Financial Accounting is heavily regulated, and a great deal of regulation changes each year. The complication of financial statements for the financial year is obligatory. The financial statements show the company as a whole. The information in the financial statements is mostly defined in financial values, which is mandated to help investors and creditors in making decisions on the placement of investment funds. Managers of the company and their employees need this information to manage and control the daily activities of the company. Financial information is also used in the implementation of tax payments. The information content of the published financial statement is typically supervised by an auditor. Accounting information and concepts provide a reliable set of data with which to prepare financial reports for analysis purposes (for tax authorities, lenders, investors and other government agencies).

The Financial Accounting Standards Board establishes standards of financial accounting that govern the preparation of financial reports in the private sector.

- Standards are officially recognized as authoritative bythe Securities and Exchange Commission(SEC) and the Standard Boards of Accountancy (SBA).

Source of Authoritative Standards

- FASB Accounting Standards Codification.

Mission of the FASB:

- The Financial Accounting Standard Board (FASB)identifies the Qualitative Characteristics of accounting information from less useful information for decision-making purposes, based on requests or recommendations from stakeholders.

Without doubts, financial accounting is one of the most difficult spheres. Any mistake made in financial reporting calculations may lead to administrative, criminal or some other kinds of punishment. Financial accounting requires paying attention to many small details, which means that a person should be responsible, accurate, patient with analytical mind and good knowledge of special computer programs for preparing financial statements such as balance sheet, income statement and cash flow statement. The strength of a company is directly dependent on its employees. To become a good specialist in this sphere, a financial accountant should spend years of practice, which lead to excellent opportunity for getting well-paid and prestigious working place.