Text: Accountancy

Accountancy (British English) or accounting (American English) is the measurement, disclosure or provision of assuranceabout information that helps managers and other decision makers make resource allocation decisions. Financial accounting is one branch ofaccounting and historically has involved processes by which financialinformation about a business is recorded, classified, summarized, interpreted,and communicated. Auditing, arelated but separate discipline, is the process whereby an independent auditorexamines an organization’s financialstatements in order to express an opinion (with reasonable but not absoluteassurance) as to the fairness and adherenceto generally accepted accounting principles, in all material respects.

Practitioners of accountancy are known asaccountants. Officially licensed accountants are recognized by titles such as Chartered Accountant (UK) or Certified Public Accountant (US).

Accountancy attempts to create accurate financial reports that areuseful to managers, regulators, and other stakeholders such as shareholders,creditors, or owners. The day-to-day record-keepinginvolved in this process is known as book-keeping.

At the heart of modern financial accounting is the double-entry bookkeeping system. This system involves making atleast two entries for every transaction: a debit in one account,and a corresponding credit inanother 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 firstused in medieval Europe, although some believe that the system dates back toAncient Greece.