The Distinction Between Accounting and Accountancy
What is Accounting?
Accounting is the method of recording financial transactions, classifying and summarizing them, and then interpreting their implications. It entails collecting, preserving, analyzing, and interpreting financial data utilizing a series of financial statements. Accounting is concerned with the financial well-being of a company or an individual, and it is often utilized to prepare financial reports that may be used to make crucial decisions.
What is Accountancy?
Accountancy, on the other hand, is the task of maintaining, auditing, and reviewing financial accounts. It entails ensuring the accuracy of financial data by performing checks on financial transactions and recording them in financial reports that meet accounting standards. Accountants usually work within accountancy as performers who handle the accounting information of businesses and individuals.
The Distinction
The main distinction between accounting and accountancy is that accounting simply refers to the process of collecting, analyzing, and presenting financial data to support decision-making. Accountancy, on the other hand, entails the creation and upkeep of financial accounts to guarantee the accuracy and legality of financial reporting.
Accounting is the activity of gathering and organizing financial data and delivering it in a comprehensible manner, while accountancy is the responsibility of ensuring that accounting works are performed correctly to maintain financial accuracy. In essence, accounting is concerned with collecting data while accountancy is concerned with verifying data.
In conclusion, although accounting and accountancy share similarities, they are two distinct fields with different tasks. Knowing these distinctions is critical in ensuring that the correct people are performing accounting or accountancy tasks in a company.
Table difference between accounting and accountancy
| Accounting | Accountancy |
|---|---|
| Refers to the process of recording, classifying, summarizing and interpreting financial transactions of a business. | Refers to the profession or field of work that deals with accounting. |
| Focuses on the practical application of financial principles to assist in decision-making. | Focuses on the theoretical understanding and development of financial principles. |
| More commonly used in the United States and Canada. | More commonly used in the United Kingdom and Commonwealth countries. |
| Can refer to both the financial department of a business or the process of accounting itself. | Refers specifically to the profession of accounting and the qualifications needed to practice it. |