What Is Accounting Anyway?

Anyone who's worked in an office at some point or another has had to go to
accounting. They're the people who pay and send out the bills that keep the
business running. They do a lot more than that, though. Sometimes referred to
as "bean counters" they also keep their eye on profits, costs and losses.
Unless you're running your own business and acting as your own accountant,
you'd have no way of knowing just how profitable -- or not -- your business is
without some form of accounting.

No matter what business you're in, even if all you do is balance a checkbook,
that's still accounting. It's part of even a kid's life. Saving an allowance,
spending it all at once -- these are accounting principles.

What are some other businesses where accounting is critical? Well, farmers need
to follow careful accounting procedures. Many of them run their farms year to
year by taking loans to plant the crops. If it's a good year, a profitable one,
then they can pay off their loan; if not, they might have to carry the loan
over, and accrue more interest charges.

Every business and every individual needs to have some kind of accounting
system in their lives. Otherwise, the finances can get away from them, they
don't know what they've spent, or whether they can expect a profit or a loss
from their business. Staying on top of accounting, whether it's for a
multi-billion dollar business or for a personal checking account is a necessary
activity on a daily basis if you're smart. Not doing so can mean anything from a
bounced check or posting a loss to a company's shareholders. Both scenarios can
be equally devastating.

Accounting is basically information, and this information is published
periodically in business as a profit and loss statement, or an income statement.

Gains and Losses

It would probably be ideal if business and life were as simple as producing
goods, selling them and recording the profits. But there are often
circumstances that disrupt the cycle, and it's part of the accountants job to
report these as well. Changes in the business climate, or cost of goods or any
number of things can lead to exceptional or extraordinary gains and losses in a
business. Some things that can alter the income statement can include downsizing
or restructuring the business. This used to be a rare thing in the business
environment, but is now fairly commonplace. Usually it's done to offset losses
in other areas and to decrease the cost of employees' salaries and benefits.
However, there are costs involved with this as well, such as severance pay,
outplacement services, and retirement costs.

In other circumstances, a business might decide to discontinue certain product
lines. Western Union, for example, recently delivered its very last telegram.
The nature of communication has changed so drastically, with email, cell phones
and other forms, that telegrams have been rendered obsolete. When you no longer
sell enough of a product at a high enough profit to make the costs of
manufacturing it worthwhile, then it's time to change your product mix.

Lawsuits and other legal actions can cause extraordinary losses or gains as
well. If you win damages in a lawsuit against others, then you've incurred an
extraordinary gain. Likewise if your own legal fees and damages or fines are
excessive, then these can significantly impact the income statement.

Occasionally a business will change accounting methods or need to correct any
errors that had been made in previous financial reports. Generally Accepted
Accounting Procedures (GAAP) require that businesses make any one-time losses
or gains very visible in their income statement.

Balance sheet

A balance sheet is a quick picture of the financial condition of a business at
a specific period in time. The activities of a business fall into two separate
groups that are reported by an accountant. They are profit-making activities,
which includes sales and expenses. This can also be referred to as operating
activities. There are also financing and investing activities that include
securing money from debt and equity sources of capital, returning capital to
these sources, making distributions from profit to the owners, making
investments in assets and eventually disposing of the assets.

Profit making activities are reported in the income statement; financing and
investing activities are found in the statement of cash flows. In other words,
two different financial statements are prepared for the two different types of
transactions. The statement of cash flows also reports the cash increase or
decrease from profit during the year as opposed to the amount of profit that is
reported in the income statement.

The balance sheet is different from the income and cash flow statements which
report, as it says, income of cash and outgoing cash. The balance sheet
represents the balances, or amounts, or a company's assets, liabilities and
owners' equity at an instant in time. The word balance has different meanings
at different times. As it's used in the term balance sheet, it refers to the
balance of the two opposite sides of a business, total assets on one side and
total liabilities on the other. However, the balance of an account, such as the
asset, liability, revenue and expense accounts, refers to the amount in the
account after recording increases and decreases in the account, just like the
balance in your checking account. Accountants can prepare a balance sheet any
time that a manager requests it. But they're generally prepared at the end of
each month, quarter and year. It's always prepared at the close of business on
the last day of the profit period.

Revenue and receivables

In most businesses, what drives the balance sheet are sales and expenses. In
other words, they cause the assets and liabilities in a business. One of the
more complicated accounting items are the accounts receivable. As a
hypothetical situation, imagine a business that offers all its customers a
30-day credit period, which is fairly common in transactions between
businesses, (not transactions between a business and individual consumers).

An accounts receivable asset shows how much money customers who bought products
on credit still owe the business. It's a promise of case that the business will
receive. Basically, accounts receivable is the amount of uncollected sales
revenue at the end of the accounting period. Cash does not increase until the
business actually collects this money from its business customers. However, the
amount of money in accounts receivable is included in the total sales revenue
for that same period. The business did make the sales, even if it hasn't
acquired all the money from the sales yet. Sales revenue, then isn't equal to
the amount of cash that the business accumulated.

To get actual cash flow, the accountant must subtract the amount of credit
sales not collected from the sales revenue in cash. Then add in the amount of
cash that was collected for the credit sales that were made in the preceding
reporting period. If the amount of credit sales a business made during the
reporting period is greater than what was collected from customers, then the
accounts receivable account increased over the period and the business has to
subtract from net income that difference.

If the amount they collected during the reporting period is greater than the
credit sales made, then the accounts receivable decreased over the reporting
period, and the accountant needs to add to net income that difference between
the receivables at the beginning of the reporting period and the receivables at
the end of the same period.

Inventory and expenses

Inventory is usually the largest current asset of a business that sells
products. If the inventory account is greater at the end of the period than at
the start of the reporting period, the amount the business actually paid in
cash for that inventory is more than what the business recorded as its cost of
good sold expense. When that occurs, the accountant deducts the inventory
increase from net income for determining cash flow from profit.

the prepaid expenses asset account works in much the same way as the change in
inventory and accounts receivable accounts. However, changes in prepaid
expenses are usually much smaller than changes in those other two asset
accounts.

The beginning balance of prepaid expenses is charged to expense in the current
year, but the cash was actually paid out last year. this period, the business
pays cash for next period's prepaid expenses, which affects this period's cash
flow, but doesn't affect net income until the next period. Simple, right?

As a business grows, it needs to increase its prepaid expenses for such things
as fire insurance premiums, which have to be paid in advance of the insurance
coverage, and its stocks of office supplies. Increases in accounts receivable,
inventory and prepaid expenses are the cash flow price a business has to pay
for growth. Rarely do you find a business that can increase its sales revenue
without increasing these assets.

The lagging behind effect of cash flow is the price of business growth.
Managers and investors need to understand that increasing sales without
increasing accounts receivable isn't a realistic scenario for growth. In the
real business world, you generally can't enjoy growth in revenue without
incurring additional expenses.

Depreciation

Depreciation is a term we hear about frequently, but don't really understand.
It's an essential component of accounting however. Depreciation is an expense
that's recorded at the same time and in the same period as other accounts.
Long-term operating assets that are not held for sale in the course of business
are called fixed assets. Fixed assets include buildings, machinery, office
equipment, vehicles, computers and other equipment. It can also include items
such as shelves and cabinets. Depreciation refers to spreading out the cost of
a fixed asset over the years of its useful life to a business, instead of
charging the entire cost to expense in the year the asset was purchased. That
way, each year that the equipment or asset is used bears a share of the total
cost. As an example, cars and trucks are typically depreciated over five years.
The idea is to charge a fraction of the total cost to depreciation expense
during each of the five years, rather than just the first year.

Depreciation applies only to fixed assets that you actually buy, not those you
rent or lease. Depreciation is a real expense, but not necessarily a cash
outlay expense in the year it's recorded. The cash outlay does actually occur
when the fixed asset is acquired, but is recorded over a period of time.

Depreciation is different from other expenses. It is deducted from sales
revenue to determine profit, but the depreciation expense recorded in a
reporting period doesn't require any true cash outlay during that period.
Depreciation expense is that portion of the total cost of a business's fixed
assets that is allocated to the period to record the cost of using the assets
during period. The higher the total cost of a business's fixed assets, then the
higher its depreciation expense.

Depreciation reporting

In an accountant's reporting systems, depreciation of a business's fixed assets
such as its buildings, equipment, computers, etc. is not recorded as a cash
outlay. When an accountant measures profit on the accrual basis of accounting,
he or she counts depreciation as an expense. Buildings, machinery, tools,
vehicles and furniture all have a limited useful life. All fixed assets, except
for actual land, have a limited lifetime of usefulness to a business.
Depreciation is the method of accounting that allocates the total cost of fixed
assets to each year of their use in helping the business generate revenue.

Part of the total sales revenue of a business includes recover of cost invested
in its fixed assets. In a real sense a business sells some of its fixed assets
in the sales prices that it charges it customers. For example, when you go to a
grocery store, a small portion of the price you pay for eggs or bread goes
toward the cost of the buildings, the machinery, bread ovens, etc. Each
reporting period, a business recoups part of the cost invested in its fixed
assets.

It's not enough for the accountant to add back depreciation for the year to
bottom-line profit. The changes in other assets, as well as the changes in
liabilities, also affect cash flow from profit. The competent accountant will
factor in all the changes that determine cash flow from profit. Depreciation is
only one of many adjustments to the net income of a business to determine cash
flow from operating activities. Amortization of intangible assets is another
expense that is recorded against a business's assets for year. It's different
in that it doesn't require cash outlay in the year being charged with the
expense. That occurred when the business invested in those tangible assets.

Investing and financing

Another portion of the statement of cash flows reports the investment that the
company took during the reporting year. New investments are signs of growing or
upgrading the production and distribution facilities and capacity of the
business. Disposing of long-term assets or divesting itself of a major part of
its business can be good or bad news, depending on what's driving those
activities. A business generally disposes of some of its fixed assets every
year because they reached the end of their useful lives and will not be used
any longer. These fixed assets are disposed of or sold or traded in on new
fixed assets. The value of a fixed asset at the end of its useful life is
called its salvage value. The proceeds from selling fixed assets are reported
as a source of cash in the investing activities section of the statement of
cash flows. Usually these are very small amounts.

Like individuals, companies at times have to finance its acquisitions when its
internal cash flow isn't enough to finance business growth. financing refers to
a business raising capital from debt and quity sources, by borrowing money from
banks and other sources willing to loan money to the business and by its owners
putting additional money in the business. The term also includes the other side,
making payments on debt and returning capital to owners. it includes cash
distributions by the business from profit to its owners.

Most business borrow money for both short terms and long terms. Most cash flow
statements report only the net increase or decrease in shortterm debt, not the
total amounts borrowed and total payments on the debt. When reporting long-term
debt, however, both the total amounts and the repayments on long-term debt
during a year are generally reported in the statement of cash flows. These are
reported as gross figures, rather than net.

Building Cash Reserves

Building a financial cushion for your business is never easy. Experts say that
businesses should have anywhere from six to nine months worth of income safely
stored away in the bank. If you're a business grossing $250,000 per month, the
mere thought of saving over $1.5 million dollars in a savings account will
either have you collapsing from fits of laughter or from the paralyzing panic
that has just set in. What may be a nice well-advised idea in theory can easily
be tossed right out the window when you're just barely making payroll each
month. So how is a small business owner to even begin a prudent savings program
for longterm success?

Realizing that your business needs a savings plan is the first step toward
better management. The reasons for growing a financial nest egg are strong.
Building savings allows you to plan for future growth in your business and have
ready the investment capital necessary to launch those plans. Having a source of
back-up income can often carry a business through a rough time.

When market fluctuations, such as the dramatic increase in gasoline and oil
prices, start to affect your business, you may need to dip into your savings to
keep operations running smoothly until the difficulties pass. Savings can also
support seasonal businesses with the ability to purchase inventory and cover
payroll until the flush of new cash arrives. Try to remember that you didn't
build your business overnight and you cannot build a savings account instantly
either.

Review your books monthly and see where you can trim expenses and reroute the
savings to a separate account. This will also help to keep you on track with
cash flow and other financial issues. While it can be quite alarming to see
your cash flowing outward with seemingly no end in sight, it's better to see it
happening and put corrective measures into place, rather than discovering your
losses five or six months too late. Quasar software

Accounting has become more and more complex as have the businesses that use
accounting functions. Fortunately, there are several excellent software
packages that can help you manage this important function. Quasar is one such
package.

All versions of Quasar offer comprehensive inventory controls. In its most
basic use, the inventory module allows a business owner to track the locations
and quantities of all inventory items. Additionally, the inventory capabilities
go beyond simple record-keeping. Manufacturers and wholesalers can assemble kits
using component items; whenever a kit is assembled, the inventory representing
its component items are adjusted accordingly. Items can be grouped into various
categories and the groups can be nested many levels deep. Vendor purchase orders
can be generated for items whose quantities are below a preset level. Costs and
selling prices for items can be set and discounted in a myriad of different
ways. Finally, these items can be reported upon to show such things as profits,
margins, and sales per item.

Sales and purchasing are another strength of Quasar. Customer quotes can be
easily converted to invoices to be paid. Promotions can be created and
discounts can be given based on date, customer, or store location. Margins can
be reported upon for traits such as individual items, individual customers, or
individual salesperson. Likewise, a purchase order can be created and converted
to a vendor invoice, which can be paid in a number of different ways, including
printing a check. Quasar can keep track of miscellaneous fees such as container
deposits, freight charges, and franchise fees.

The intelligent design of Quasar's user interface allows for quick and easy
data entry. Some programs you may encounter are not optimized for keyboard use.
These programs require you to move your hand to the mouse to select frequently
needed options. While some of Quasar's menu options are only mouse-accessible,
the bulk of Quasar's user interface is designed in such a way that you can keep
you hands on the keyboard by using special shortcuts. This allows for faster
data entry, which can save time (and therefore money) in the long run.

Basic Accounting Principles

Accounting has been defined as, by Professor of Accounting at the University of
Michigan William A Paton as having one basic function: "facilitating the
administration of economic activity. This function has two closely related
phases: 1) measuring and arraying economic data; and 2) communicating the
results of this process to interested parties."

As an example, a company's accountants periodically measure the profit and loss
for a month, a quarter or a fiscal year and publish these results in a statement
of profit and loss that's called an income statement. These statements include
elements such as accounts receivable (what's owed to the company) and accounts
payable (what the company owes). It can also get pretty complicated with
subjects like retained earnings and accelerated depreciation. This at the
higher levels of accounting and in the organization.

Much of accounting though, is also concerned with basic bookkeeping. This is
the process that records every transaction; every bill paid, every dime owed,
every dollar and cent spent and accumulated.

But the owners of the company, which can be individual owners or millions of
shareholders are most concerned with the summaries of these transactions,
contained in the financial statement. The financial statement summarizes a
company's assets. A value of an asset is what it cost when it was first
acquired. The financial statement also records what the sources of the assets
were. Some assets are in the form of loans that have to be paid back. Profits
are also an asset of the business.

In what's called double-entry bookkeeping, the liabilities are also summarized.
Obviously, a company wants to show a higher amount of assets to offset the
liabilities and show a profit. The management of these two elements is the
essence of accounting.

There is a system for doing this; not every company or individual can devise
their own systems for accounting; the result would be chaos!

Managing the Bottom Line

If you don't keep track of how much money you're making, you have no idea
whether your business is successful or not. You can't tell how well your
marketing is working. And I don't just mean you should know the amount of your
total sales or gross revenue. You need to know what your net profit is. If you
don't, there's no way you can know how to increase it.

If you want your business to be successful, you need to make a financial plan
and check it against the facts on a monthly basis, then take immediate action
to correct any problems. Here are the steps you should take:

* Create a financial plan for your business. Estimate how much revenue you
expect to bring in each month, and project what your expenses will be.

* Remember that lost profits can't be recovered. When entrepreneurs compare
their projections to reality and find earnings too low or expenses too high,
they often conclude, "I'll make it up later." The problem is that you really
can't make it up later: every month profits are too low is a month that is gone
forever.

* Make adjustments right away. If revenues are lower than expected, increase
efforts in sales and marketing or look for ways to increase your rates. If
overhead costs are too high, find ways to cut back. There are other businesses
like yours around. What is their secret for operating profitably?

* Think before you spend. When considering any new business expense, including
marketing and sales activities, evaluate the increased earnings you expect to
bring in against its cost before you proceed to make a purchase.

* Evaluate the success of your business based on profit, not revenue. It
doesn't matter how many thousands of dollars you are bringing in each month if
your expenses are almost as high, or higher. Many high-revenue businesses have
gone under for this very reason -- don't be one of them.

What is the FASB?

The FASB is one organization that provides standardized guidelines for
financial reporting. The mission of the Financial Accounting Standards Board
(FASB) is to establish and improve standards of financial accounting and
reporting for the guidance and education of the public, including issuers,
auditors and users of financial information. Accounting standards are essential
to the efficient functioning of the economy because decisions about the
allocation of resources rely heavily on credible, concise, transparent and
understandable financial information. Financial information about the
operations and financial position of individual entities also is used by the
public in making various other kinds of decisions.

To accomplish its mission, the FASB acts to:

-- Improve the usefulness of financial reporting by focusing on the primary
characteristics of relevance and reliability and on the qualities of
comparability and consistency;

-- Keep standards current to reflect changes in methods of doing business and
changes in the economic environment;

-- Consider promptly any significant areas of deficiency in financial reporting
that might be improved through the standard-setting process;

-- Promote the international convergence of accounting standards concurrent
with improving the quality of financial reporting; and

-- Improve the common understanding of the nature and purposes of information
contained in financial reports.

The FASB develops broad accounting concepts as well as standards for financial
reporting. It also provides guidance on implementation of standards. Concepts
are useful in guiding the Board in establishing standards and in providing a
frame of reference, or conceptual framework, for resolving accounting issues.
The framework will help to establish reasonable bounds for judgment in
preparing financial information and to increase understanding of, and
confidence in, financial information on the part of users of financial reports.
It also will help the public to understand the nature and limitations of
information supplied by financial reporting.

What are auditors?

Accountants and auditors help to ensure that the Nation's firms are run
efficiently, its public records kept accurately, and its taxes paid properly
and on time. They perform these vital functions by offering an increasingly
wide array of business and accounting services, including public, management,
and government accounting, as well as internal auditing, to their clients.
Beyond carrying out the fundamental tasks of the occupation-preparing,
analyzing, and verifying financial documents in order to provide information to
clients-many accountants now are required to possess a wide range of knowledge
and skills. Accountants and auditors are broadening the services they offer to
include budget analysis, financial and investment planning, information
technology consulting, and limited legal services.

Specific job duties vary widely among the four major fields of accounting:
public, management, and government accounting and internal auditing.

Internal auditors verify the accuracy of their organization's internal records
and check for mismanagement, waste, or fraud. Internal auditing is an
increasingly important area of accounting and auditing. Internal auditors
examine and evaluate their firms' financial and information systems, management
procedures, and internal controls to ensure that records are accurate and
controls are adequate to protect against fraud and waste. They also review
company operations, evaluating their efficiency, effectiveness, and compliance
with corporate policies and procedures, laws, and government regulations. There
are many types of highly specialized auditors, such as electronic
data-processing, environmental, engineering, legal, insurance premium, bank,
and health care auditors. As computer systems make information timelier,
internal auditors help managers to base their decisions on actual data, rather
than personal observation. Internal auditors also may recommend controls for
their organization's computer system, to ensure the reliability of the system
and the integrity of the data.

Government accountants and auditors work in the public sector, maintaining and
examining the records of government agencies and auditing private businesses
and individuals whose activities are subject to government regulations or
taxation. Accountants employed by Federal, State, and local governments
guarantee that revenues are received and expenditures are made in accordance
with laws and regulations. Those employed by the Federal Government may work as
Internal Revenue Service agents or in financial management, financial
institution examination, or budget analysis and administration.

What is forensic accounting?

Forensic accounting is the practice of utilizing accounting, auditing, and
investigative skills to assist in legal matters. It encompasses 2 main areas --
litigation support, investigation, and dispute resolution. Litigation support
represents the factual presentation of economic issues related to existing or
pending litigation. In this capacity, the forensic accounting professional
quantifies damages sustained by parties involved in legal disputes and can
assist in resolving disputes, even before they reach the courtroom. If a
dispute reaches the courtroom, the forensic accountant may testify as an expert
witness.

Investigation is the act of determining whether criminal matters such as
employee theft, securities fraud (including falsification of financial
statements), identity theft, and insurance fraud have occurred. As part of the
forensic accountant's work, he or she may recommend actions that can be taken
to minimize future risk of loss. Investigation may also occur in civil matters.
For example, the forensic accountant may search for hidden assets in divorce
cases.

Forensic accounting involves looking beyond the numbers and grasping the
substance of situations. It's more than accounting...more than detective
work...it's a combination that will be in demand for as long as human nature
exists. Who wouldn't want a career that offers such stability, excitement, and
financial rewards?

In short, forensic accounting requires the most important quality a person can
possess: the ability to think. Far from being an ability that is specific to
success in any particular field, developing the ability to think enhances a
person's chances of success in life, thus increasing a person's worth in
today's society. Why not consider becoming a forensic accountant on the
Forensic Accounting Masters Degree link on the left-hand navigation bar.

Who uses forensic accountants?

Forensic accounting financial investigative specialists work with financial
information for the purpose of conveying complicated issues in a manner that
others can easily understand. While some forensic accountants and forensic
accounting specialists are engaged in the public practice of forensic
examination, others work in private industry for such entities as banks and
insurance companies or governmental entities such as sheriff and police
departments, the Federal Bureau of Investigation (FBI), and the Internal
Revenue Service (IRS).

The occupational fraud committed by employees usually involves the theft of
assets. Embezzlement has been the most often committed fraud for the last 30
years. Employees may be involved in kickback schemes, identity theft, or
conversion of corporate assets for personal use. The forensic accountant
couples observation of the suspected employees with physical examination of
assets, invigilation, inspection of documents, and interviews of those
involved. Experience on these types of engagements enables the forensic
accountant to offer suggestions as to internal controls that owners could
implement to reduce the likelihood of fraud.

At times, the forensic accountant may be hired by attorneys to investigate the
financial trail of persons suspected of engaging in criminal activity.
Information provided by the forensic accountant may be the most effective way
of obtaining convictions. The forensic accountant may also be engaged by
bankruptcy court when submitted financial information is suspect or if
employees (including managers) are suspected of taking assets.

Opportunities for qualified forensic accounting professionals abound in private
companies. CEOs must now certify that their financial statements are faithful
representations of the financial position and results of operations of their
companies and rely more heavily on internal controls to detect any misstatement
that would otherwise be contained in these financials.

In addition to these activities, forensic accountants may be asked to determine
the amount of the loss sustained by victims, testify in court as an expert
witness and assist in the preparation of visual aids and written summaries for
use in court.

What is the Sarbanes-Oxley Act?

The Sarbanes-Oxley Act of 2002 is a United States federal law passed in
response to the recent major corporate and accounting scandals including those
at Enron, Tyco International, and WorldCom (now MCI). These scandals resulted
in a decline of public trust in accounting and reporting practices. Named after
sponsors Senator Paul Sarbanes (D-Md.) and Representative Michael G. Oxley
(R-Oh.), the Act was approved by the House by a vote of 423-3 and by the Senate
99-0. The legislation is wide-ranging and establishes new or enhanced standards
for all U.S. public company Boards, Management, and public accounting firms.
The first and most important part of the Act establishes a new quasi-public
agency, the Public Company Accounting Oversight Board, which is charged with
overseeing and disciplining accounting firms in their roles as auditors of
public companies. Some of the major provisions of the Sarbanes-Oxley Act's
include:

-- Certification of financial reports by chief executive officers and chief
financial officers

-- Auditor independence, including outright bans on certain types of work for
audit clients and pre-certification by the company's Audit Committee of all
other non-audit work

-- A requirement that companies listed on stock exchanges have fully
independent audit committees that oversee the relationship between the company
and its auditor

-- Significantly longer maximum jail sentences and larger fines for corporate
executives who knowingly and willfully misstate financial statements, although
maximum sentences are largely irrelevant because judges generally follow the
Federal Sentencing Guidelines in setting actual sentences

-- Employee protections allowing those corporate fraud whistleblowers who file
complaints with OSHA within 90 days, to win reinstatement, back pay and
benefits, compensatory damages, abatement orders, and reasonable attorney fees
and costs.

What happened at Enron?

Everyone knows at least a little about the Enron story and the devastation it
created in the lives of is employees. It's a story that belongs in any
discussion of ethical accounting processes and what happens when accounting
standards and ethics are discarded for personal greed.

Enron began in 1985 selling natural gas to gas companies and businesses. In
1996, energy markets were changed so that the price of energy could now be
decided by competition among energy companies instead of being fixed by
government regulations. With this change, Enron began to function more as a
middleman than a traditional energy supplier, trading in energy contracts
instead of buying and selling natural gas. Enron's rapid growth created
excitement among investors and drove the stock price up. As Enron grew, it
expanded into other industries such as Internet services, and its financial
contracts became more complicated.

In order to keep growing at this rate, Enron began to borrow money to invest in
new projects. However, because this debt would make their earnings look less
impressive, Enron began to create partnerships that would allow it to keep debt
off of its books. One partnership created by Enron, Chewco Investments (named
after the Star Wars character Chewbacca) allowed Enron to keep $600 million in
debt off of the books it showed to the government and to people who own Enron
stock. When this debt did not show up in Enron's reports, it made Enron seem
much more successful than it actually was. In December 2000, Enron claimed to
have tripled its profits in two years.

In August 2001, Enron vice president Sherron Watkins sent an anonymous letter
to the CEO of Enron, Kenneth Lay, describing accounting methods that she felt
could lead Enron to "implode in a wave of accounting scandals." Also in August,
CEO Kenneth Lay sent e-mails to his employees saying that he expected Enron
stock prices to go up. Meanwhile, he sold off his own stock in Enron.

On October 22nd, the Securities and Exchange Commission (SEC) announced that
Enron was under investigation. On November 8th, Enron said that it has
overstated earnings for the past four years by $586 million and that it owed
over $6 billion in debt by next year.

With these announcements, Enron's stock price took a dive. This drop triggered
certain agreements with investors that made it necessary for Enron to repay
their money immediately. When Enron could not come up with the cash to repay
its creditors, it declared for Chapter 11 bankruptcy.

What happened in corporate accounting scandals?

When a corporation deliberately conceals or skews information to appear healthy
and successful to its shareholders, it has committed corporate or shareholder
fraud. Corporate fraud may involve a few individuals or many, depending on the
extent to which employees are informed of their company's financial practices.
Directors of corporations may fudge financial records or disguise inappropriate
spending. Fraud committed by corporations can be devastating, not only for
outside investors who have made share purchases based on false information, but
for employees who, through 401ks, have invested their retirement savings in
company stock. Some recent corporate accounting scandals have consumed the news
media and ruined hundreds of thousands of lives of the employees who had their
retirement invested in the companies that defrauded them and other investors.
The nuts and bolts of some of these accounting scandals are as follows:

WorldCom admitted to adjusting accounting records to cover its operation costs
and present a successful front to shareholders. Nine billion dollars in
discrepancies were discovered before the telecom corporation went bankrupt in
July of 2002. One of the hidden expenses was $408 million given to Bernard
Ebbers (WorldCom's CEO) in undisclosed personal loans.

At Tyco, shareholders were not informed of the $170 million in loans that were
taken by Tyco's CEO, CFO, and chief legal officer. The loans, many of which
were taken interest free and later written off as benefits, were not approved
by Tyco's compensation committee. Kozlowski (former CEO), Swartz (former CFO),
and Belnick (former chief legal officer) face continuing investigations by the
SEC and the Tyco Corporation, which is now operating under Edward Breen and a
new board of directors.

At Enron, investigations against uncovered multiple acts of fraudulent
behavior. Enron used illegal loans and partnerships with other companies to
cover its multi-billion dollar debt. It presented erroneous accounting records
to investors, and Arthur Anderson, its accounting firm, began shredding
incriminating documentation weeks before the SEC could begin investigations.
Money laundering, wire fraud, mail fraud, and securities fraud are just some of
the indictments directors of Enron have faced and will continue to face as the
investigation continues.

Disclosure

Financial statements are the backbone of a complete financial report. In fact,
a financial report is not complete if the three primary financial statements
are not included. but a financial report is much more than just those
statements. A financial report requires disclosures. This term refers to
additional information provided in a financial report. Therefore, any
comprehensive and ethical financial report must include not only the primary
financial statements, but disclosures as well.

The chief executive of a business (usually the CEO in a publicly held
corporation) has the primary responsibility to make sure that the financial
statements have been prepared according to generally accepted accounting
principles (GAAP) and the financial report provides adequate disclosures. He or
she works with the chief financial officer or controller of the business to make
sure that the financial report meets the standard of adequate disclosures.

Some common methods of disclosures include:

-- Footnotes that provide information about the basic figures. Nearly all
financial statements require footnotes to provide additional information for
several of the account balances in the financial statements.

-- Supplementary financial schedules and tables that provide more details than
can be included in the body of the financial statements.

-- Other information may be required if the business is a public corporation
subject to federal regulations regarding financial reporting to its
stockholders. Other information is voluntary and not strictly required legally
or according to GAAP.

Some disclosures are required by various governing boards and agencies. These
include:

-- The financial Accounting Standards Board (FASB) has designated many
standards. Its dictate regarding disclosure of the effects of stock options is
one such standard.

-- The Securities and Exchange Commission (SEC) mandates disclosure of a broad
range of information for publicly held companies.

-- International businesses have to abide by disclosure standards adopted by
the International Accounting Standards Board.

What is financial window dressing?

Financial managers can do certain things to increase or decrease net income
that's recorded in the year. This is called profit smoothing, income smoothing
or just plain old window dressing. This isn't the same as fraud, or cooking the
books.

Most profit smoothing involves pushing some amount of revenue and/or expenses
into other years than they would normally be recorded. A common technique for
profit smoothing is to delay normal maintenance and repairs. This is referred
to as deferred maintenance. Many routine and recurring maintenance costs
required for autos, trucks, machines, equipment and buildings can be delayed,
or deferred until later.

A business that spends a significant amount of money for employee training and
development may delay these programs until the next year so the expense in the
current year is lower.

A company can cut back on its current year's outlays for market research and
product development.

A business can ease up on its rules regarding when slow-paying customers are
written off to expense as bad debts or uncollectible accounts receivable. The
business can put off recording some of its bad debts expense until the next
reporting year.

A fixed asset that is not being actively used may have very little current or
future value to a business. Instead of writing off the undepreciated cost of
the impaired asset as a loss in the current year, the business might delay the
write-off until the next year.

You can see how manipulating the timing of certain expenses can make an impact
on net income. This isn't illegal although companies can go too far in
massaging the numbers so that its financial statements are misleading. For the
most part though, profit smoothing isn't much more than robbing Peter to pay
Paul. Accountants refer to these as compensatory effects. The effects next year
offset and cancel out the effects in the current year. Less expense this year is
balanced by more expense the next year.

Accounting Principles

If everyone involved in the process of accounting followed their own system, or
no system at all, there's be no way to truly tell whether a company was
profitable or not. Most companies follow what are called generally accepted
accounting principles, or GAAP, and there are huge tomes in libraries and
bookstores devoted to just this one topic. Unless a company states otherwise,
anyone reading a financial statement can make the assumption that company has
used GAAP.

If GAAP are not the principles used for preparing financial statements, then a
business needs to make clear which other form of accounting they're used and
are bound to avoid using titles in its financial statements that could mislead
the person examining it.

GAAP are the gold standard for preparing financial statement. Not disclosing
that it has used principles other than GAAP makes a company legally liable for
any misleading or misunderstood data. These principles have been fine-tuned
over decades and have effectively governed accounting methods and the financial
reporting systems of businesses. Different principles have been established for
different types of business entities, such for-profit and not-for-profit
companies, governments and other enterprises.

GAAP are not cut and dried, however. They're guidelines and as such are often
open to interpretation. Estimates have to be made at times, and they require
good faith efforts towards accuracy. You've surely heard the phrase "creative
accounting" and this is when a company pushes the envelope a little (or a lot)
to make their business look more profitable than it might actually be. This is
also called massaging the numbers. This can get out of control and quickly turn
into accounting fraud, which is also called cooking the books. The results of
these practices can be devastating and ruin hundreds and thousands of lives, as
in the cases of Enron, Rite Aid and others.

What is a corporation?

Most businesses start out as a small company, owned by one person or by a
partnership. The most common type of business when there are multiple owners is
a corporation. The law sees a corporation as real, live person. Like an adult, a
corporation is treated as a distinct and independent individual who has rights
and responsibilities. A corporation's "birth certificate" is the legal form
that is filed with the Secretary of State of the state in which the corporation
is created, or incorporated. It must have a legal name, just like a person.

A corporation is separate from its owners. It's responsible for its own debts.
The bank can't come after the stockholders if a corporation goes bankrupt.

A corporation issues ownership share to persons who invest money in the
business. These ownership shares are documented by stock certificates, which
state the name of the owner and how many shares are owned. the corporation has
to keep a register, or list, of how many shares everyone owns. Owners of a
corporation are called stockholders because they own shares of stock issued by
the corporation. One share of stock is one unit of ownership; how much one
share is worth depends on the total number of shares that the business issues.
the more shares a business issues, the smaller the percentage of total owners'
equity each share represents.

Stock shares come in different classes of stock. Preferred stockholders are
promised a certain amount of cash dividends each year. Common stockholders have
the most risk. If a corporation ends up in financial trouble, it's required to
pay off its liabilities first. If any money is left over, then that money goes
first to the preferred stockholders. If anything is left over after that, then
that money is distributed to the common stockholders.

What are partnerships and limited liability companies?

Some business owners choose to create partnerships or limited liability
companies instead of a corporation. A partnership can also be called a firm,
and refers to an association of a group of individuals working together in a
business or professional practice.

While corporations have rigid rules about how they are structured, partnerships
and limited liability companies allow the division of management authority,
profit sharing and ownership rights among the owners to be very flexible.

Partnerships fall into two categories. General partners are subject to
unlimited liability. If a business can't pay its debts, its creditors can
demand payment from the general partners' personal assets. General partners
have the authority and responsibility to manage the business. They're analogous
to the president and other officers of a corporation.

Limited partners escape the unlimited liability that the general partners have.
They are not responsible as individuals, for the liabilities of the partnership.
These are junior partners who have ownership rights to the profits of the
business, but they don't generally participate in the high-level management of
the business. A partnership must have one or more general partners.

A limited liability company (LLC) is becoming more prevalent among smaller
businesses. An LLC is like a corporation regarding limited liability and it's
like a partnership regarding the flexibility of dividing profit among the
owners. Its advantage over other types of ownership is its flexibility in how
profit and management authority are determined. This can have a downside. The
owners must enter into very detailed agreements about how the profits and
management responsibilities are divided. It can get very complicated and
generally requires the services of a lawyer to draw up the agreement.

A partnership or LLC agreement specifies how profits will be divided among the
owners. While stockholders of a corporation receive a share of profit that's
directly related to how many shares they own, a partnership or LLC does not
have to divide profit according to how much each partner invested. Invested
capital is only of the factors that are used in allocating and distributing
profits.

What is a sole proprietorship?

A sole proprietorship is the business or an individual who has decided not to
carry his business as a separate legal entity, such as a corporation,
partnership or limited liability company. This kind of business is not a
separate entity. Any time a person regularly provides services for a fee, sells
things at a flea market or engage in any business activity whose primary purpose
is to make a profit, that person is a sole proprietor. If they carry on business
activity to make profit or income, the IRS requires that you file a separate
Schedule C "Profit or Loss From a Business" with your annual individual income
tax return. Schedule C summarizes your income and expenses from your sole
proprietorship business.

As the sold proprietor of a business, you have unlimited liability, meaning
that if your business can't pay all it liabilities, the creditors to whom your
business owes money can come after your personal assets. Many part-time
entrepreneurs may not know this, but it's an enormous financial risk. If they
are sued or can't pay their bills, they are personally liable for the
business's liabilities.

A sole proprietorship has no other owners to prepare financial statements for,
but the proprietor should still prepare these statements to know how his
business is doing. Banks usually require financial statements from sole
proprietors who apply for loans. A partnership needs to maintain a separate
capital or ownership account for each partners. The total profit of the firm is
allocated into these capital accounts, as spelled out in the partnership
agreement. Although sole proprietors don't have separate invested capital from
retained earnings like corporations do, they still need to keep these two
separate accounts for owners' equity -- not only to track the business, but for
the benefit of any future buyers of the business.

About GAAP

While many businesses assume that accountants are bound by generally accepted
accounting practices and that these are inviolate, nothing could be further
from the truth. Everything is subject to interpretation, and GAAP is no
different. For one thing, GAAP themselves permit alternative accounting methods
to be used for certain expenses and for revenue in certain specialized types of
businesses. For another, GAAP methods require that decisions be made about the
timing for recording revenue and expenses, or they require that key factors be
quantified. Deciding on the timing of revenue and expenses and putting definite
values on these factors require judgments, estimates and interpretations.

The mission of GAAP over the years has been to standardize accounting methods
in order to bring about uniformity across all businesses. But alternative
methods are still permitted for certain basic business expenses. No tests are
required to determine whether one method is more preferable than another. A
business is free to select whichever method it wants. But it must choose which
cost of good sold expense method to use and which depreciation expense method
to use.

For other expenses and for sales revenue, one general accounting method has
been established; there are no alternative methods. However, a business has a
fair amount of latitude in actually implementing the methods. One business
applies the accounting methods in a conservative manner, and another business
applies the methods in a more liberal manner. The end result is more diversity
between businesses in their profit measure and financial statements than one
might expect, considering that GAAP have been evolving since 1930.

The pronouncement on GAAP prepared by the Financial Accounting Standards Board
(FASB) is now more than 1000 pages long. And that doesn't even include the
rules and regulations issued by the federal regulatory agency that jurisdiction
over the financial reporting and accounting methods of publicly owned businesses
-- the Securities and Exchange Commission (SEC).

Types of Costs

Direct costs are those costs that cann be directly attributed to a product or
product line, or to one source of sales revenue, or one business unit or
operation of the business. An example of a direct cost would be the cost of
tires on a new automobile.

Indirect costs are very different and can't be attached to any specific
product, unit or activity. The cost of labor or benefits for an auto
manufacturer is certainly a cost, but it can't be attached to any one vehicle.
Each business has to devise a method of allocating indirect costs to different
products, sources of sales revenue, business units, etc. Most allocation
methods are less than perfect, and generally end up being arbitrary to one
degree or another. Business managers and accounts should always keep an eye on
the allocation methods used for indirect costs and take the cost figures
produced by these methods with a grain of salt.

Fixed costs are those costs that stay the same over a relatively broad range of
sales volume or production output. They're like an albatross around the neck of
business and a company must sell its product at a high enough profit to at
least break even.

Variable costs can increase and decrease in proportion to changes in sales or
production level. Variable costs vary proportionately with changes in
production/

Relevant costs are essentially future costs that could be incurred, depending
on what strategic course a business takes. If an auto manufacturer decides to
increase production, but the cost of tires goes up, than that cost needs to be
taken into consideration.

Irrelevant costs are those that should be disregarded when deciding on a future
course of action. They're costs that could cause you to make a wrong decision.
Whereas relevant costs are future costs, irrelevant costs are those costs that
were incurred in the past. The money's gone.

Measuring Costs

Measuring profits or net income is the most important thing accountants do. The
second most important task is measuring costs. Costs are extremely important to
running a business and managing them effectively can make a substantial
difference in a company's bottom line.

Any business that sells products needs to know its product costs and depending
on what is being manufactured and/or sold, it can get complicated. Every step
in the production process has to be tracked carefully from start to finish.
Many manufacturing costs cannot be directly matched with particular products;
these are called indirect costs. To calculate the full cost of each product
manufactured, accountants devise methods for allocating indirect production
costs to specific products. Generally accepted accounting principles (GAAP)
provide few guidelines for measuring product cost.

Accountants need to determine many other costs, in addition to product costs,
such as the costs of the departments and other organizational units of the
business; the cost of the retirement plan for the company's employees; the cost
of marketing and advertising; the cost of restructuring the business or the cost
of a major recall of products sold by the company, should that ever become
necessary.

Cost accounting serves two broad purposes: measuring profit and furnishing
relevant information to managers. What makes it confusing is that there's no
one set method for measuring and reporting costs, although accuracy is
paramount. Cost accounting can fall anywhere on a continuum between
conservative or expansive. The phrase actual cost depends entirely on the
particular methods used to measure cost. These can often be as subjective and
nebulous as some systems for judging sports. Again accuracy is extremely
important. The total cost of goods or products sold is the first and usually
largest expense deducted from sales revenue in measuring profit.

Parts of an Income Statement, part 1

The first and most important part of an income statement is the line reporting
sales revenue. Businesses need to be consistent from year to year regarding
when they record sales. For some business, the timing of recording sales
revenue is a major problem, especially when the final acceptance by the
customer depends on performance tests or other conditions that have to be
satisfied. For example, when does an ad agency report the sales revenue for a
campaign it's prepared for its client? When the work is completed and sent to
the client for approval? When the client approves it? When the ads appear in
the media? Or when the billing is complete? These are issues a company must
decide on for reporting sales revenue, and they must be consistent each year,
and the timing of reporting should be noted on the financial statement.

The next line in an income statement is the cost of goods sold expense. There
are three methods of reporting cost of goods sold expense. One is called "first
in-first out" (FIFO); another is the "last in-last out" (LIFO) method and the
last is the average cost method. Cost of goods sold expense is a huge item in
an income statement and how it's reported can make a substantial impact on the
reported bottom line.

Other items in an income statement include inventory write-downs. A business
should regularly inspect its inventory carefully to determine any losses due to
theft, damage and deterioration, and to apply the lower of cost or market (LCM)
method. Bad debts are also an important component of the income statement. Bad
debts are those owed to a business by customers who bought on credit (accounts
receivable) but are not going to be paid. Again the timing of when bad debts
are reported is crucial. Do you report it before or after any collection
efforts are exhausted?

Parts of an Income Statement, Part 2

Of course profit and cost of goods sold expense are the two most critical
components of an income statement, or at least they're what people will look at
first. But an income statement is truly the sum of its parts, and they all need
to be considered carefully, consistently and accurately.

In reporting depreciation expense, a business can use a short-life method and
load most of the expense over the first few years, or a longer-life method and
spread the expense evenly over the years. Depreciation is a big expense for
some businesses and the method of reporting is especially critical for them.

One of the more complex elements of a an income statement is the line reporting
employee pensions and post-retirement benefits. The GAAP rule on this expense is
complex and several key estimates must be made by the business, such as the
expected rate of return on the portfolio of funds set aside for these future
obligations. This and other estimates affect the amount of expense recorded.

Many products are sold with expressed or implied warranties and guarantees. The
business should estimate the cost of these future obligations and record this
amount as an expense in the same period that the goods are sold, along with the
cost of goods expense. It can't really wait until customers actually return
products for repair or replacement, should be forecast as a percent of the
total products sold.

Other operating expenses that are reported in an income statement may also have
timing or estimating considerations. Some expenses are also discretionary in
nature, which means that how much is spent during the year depends on the
discretion of management.

Earnings before interest and tax (EBIT) measures the sales revenue less all the
expenses above this line. It depends on all the decisions made for recording
sales revenue and expenses and how the accounting methods are implemented.

Parts of an Income Statement, Part 3

While some lines of an income statement depend on estimates or forecasts, the
interest expense line is a basic equation. When accounting for income tax
expense, however, a business can use different accounting methods for some of
its expenses than it uses for calculating its taxable income. The hypothetical
amount of taxable income, if the accounting methods used were used in the tax
return is calculated. Then the income tax based on this hypothetical taxable
income is fitured. This is the income tax expense reported in the income
statement. This amount is reconciled with the actual amount of income tax owed
based on the accounting methods used for income tax purposes. A reconciliation
of the two different income tax amounts is then provided in a footnote on the
income statement.

Net income is like earnings before interest and tax (EBIT) and can vary
considerably depending on which accounting methods are used to report sales
revenue and expenses. This is where profit smoothing can come into play to
manipulate earnings. Profit smoothing crosses the line from choosing acceptable
accounting methods from the list of GAAP and implementing these methods in a
reasonable manner, into the gray area of earnings management that involves
accounting manipulation.

It's incumbent on managers and business owners to be involved in the decisions
about which accounting methods are used to measure profit and how those methods
are actually implemented. A manager can be requires to answer questions about
the company's financial reports on many occasions. It's therefore critical that
any officer or manager in a company be thoroughly familiar with how the
company's financial statements are prepared. Accounting methods and how they're
implemented vary from business to business. A company's methods can fall
anywhere on a continuum that's either left or right of center of GAAP.

Bookkeeping

So what goes on the accounting and bookkeeping departments? What do these
people do on a daily basis?

Well, one thing they do that's terribly important to everyone working there is
Payroll. All the salaries and taxes earned and paid by every employee every pay
period have to be recorded. The payroll department has to ensure that the
appropriate federal, state and local taxes are being deducted. The pay stub
attached to your paycheck records these taxes. They usually include income tax,
social security taxes pous employment taxes that have to be paid to federal and
state government. Other deductions include personal ones, such as for
retirement, vacation, sick pay or medical benefits. It's a critical function.
Some companies have their own payroll departments; others outsource it to
specialists.

The accounting department receives and records any payments or cash received
from customers or clients of the business or service. The accounting department
has to make sure that the money is sourced accurately and deposited in the
appropriate accounts. They also manage where the money goes; how much of it is
kept on-hand for areas such as payroll, or how much of it goes out to pay what
the company owes its banks, vendors and other obligations. Some should also be
invested.

The other side of the receivables business is the payables area, or cash
disbursements. A company writes a lot of checks during the course of year to
pay for purchases, supplies, salaries, taxes, loans and services. The
accounting department prepares all these checks and records to whom they were
disbursed, how much and for what. Accounting departments also keep track of
purchase orders placed for inventory, such as products that will be sold to
customers or clients. They also keep track of assets such as a business's
property and equipment. This can include the office building, furniture,
computers, even the smallest items such as pencils and pens.

How to analyze a financial statement

It's obvious financial statement have a lot of numbers in them and at first
glance it can seem unwieldy to read and understand. One way to interpret a
financial report is to compute ratios, which means, divide a particular number
in the financial report by another. Financial statement ratios are also useful
because they enable the reader to compare a business's current performance with
its past performance or with another business's performance, regardless of
whether sales revenue or net income was bigger or smaller for the other years
or the other business. In order words, using ratios can cancel out difference
in company sizes.

There aren't many ratios in financial reports. Publicly owned businesses are
required to report just one ratio (earnings per share, or EPS) and
privately-owned businesses generally don't report any ratios. Generally
accepted accounting principles (GAAP) don't require that any ratios be
reported, except EPS for publicly owned companies.

Ratios don't provide definitive answers, however. They're useful indicators,
but aren't the only factor in gauging the profitability and effectiveness of a
company.

One ratio that's a useful indicator of a company's profitability is the gross
margin ratio. This is the gross margin divided by the sales revenue. Businesses
don't discose margin information in their external financial reports. This
information is considered to be proprietary in nature and is kept confidential
to shield it from competitors.

The profit ratio is very important in analyzing the bottom-line of a company.
It indicates how much net income was earned on each $100 of sales revenue. A
profit ratio of 5 to 10 percent is common in most industries, although some
highly price-competitive industries, such as retailers or grocery stores will
show profit ratios of only 1 to 2 percent.

What is earnings per share?

Publicly owned companies must report earnings per share (EPS) below the net
income line in their income statements. This is mandated by generally accepted
accounting practices (GAAP). The EPS gives investors a means of determining the
amount the business earned on its stock share investments. In other words, EPS
tells investors how much net income the business earned for each stock share
they own. It's calculated by dividing net income by the total number of capital
stock share. It's important to the stockholders who want the net income of the
business to be communicated to them on a per share basis so they can compare it
with the market price of their shares.

Private businesses don't have to report EPS because stockholders focus more on
the business's total net income.

Publicly-held companies actually report two EPS figures, unless they have
what's known as a simple capital structure. Most publicly-held companies
though, have complex capital structures and have to report two EPS figures. One
is called the basic EPS; the other is called the diluted EPS. Basic EPS is based
on the number of stock shares that are outstanding. Diluted earnings are based
on shares that are outstanding and shares that may be issued in the future in
the form of stock options.

Obviously this is a complicated process. An accountant has to adjust the EPS
formula for any number of occurrences or changes in the business. A business
might issue additional stock shares during the year and buy back some of its
own shares. Or it might issue several classes of stock, which will cause net
income to be divided into two or more pools -- one pool for each class of
stock. A merger, acquisition or divestiture will also impact the formula for
EPS.

42 What is price/earnings ratio?

The price/earning (P/E) ratio is another measurement that's of particular
interest to investors in public businesses. The P/E ratio gives you an idea of
how much you're paying in the current price for stock shares for each dollar of
earning. Earnings prop up the market value of stock shares, not the book value
of the stock shares that's reported in the balance sheet.

The P/E ratio is a reality check on just how high the current market price is
in relation to the underlying profit that the business is earning.
Extraordinarily high P/E ratios are justified only when investors think that
the company's earnings per share (EPS) has a lot of upside potential in the
future.

The P/E ratio is calculated dividing the current market price of the stock by
the most recent trailing 12 months diluted EPS. Stock share prices bounce
around day to day and are subject to big changes on short notice. The current
P/E ratio should be compared with the average stock market P/E to gauge whether
the business selling above or below the market average.

P/E ratios are currently running high, despite a four-year slump in the stock
market. P/E ratios vary from industry to industry and from year to year. One
dollar of EPS may command only a $10 market value for a mature business in a
no-growth industry, while a dollar of EPS in a dynamic business in a growth
industry may have a $30 market value per dollar of earnings, or net income.

To sum up, the price/earnings ratio, or P/E ratio is the current market price
of a capital stock divided by its trailing 12 months' diluted earnings per
share (EPS) or its basic earnings per share if the business does not report
diluted EPS. A low P/E may signal an underbalued stock or a pessimistic
forecast by investors. A high P/E may reveal an overvalued stock or might be
based on an optimistic forecast by investors.

43 What's the difference between private and public company reporting?

A public corporation is a business whose securities are traded on the public
stock exchanges, such as the New York Stock Exchange and Nasdaq. A private
company is held solely by its owners and is not traded publicly. When the
shareholders of a private business receive the periodical financial reports,
they are entitled to assume that the company's financial statements and
footnotes are prepared in accordance with GAAP. Otherwise the president of
chief officer of the business should clearly warn the shareholders that GAAP
have not been followed in one or more respects. The content of a private
business's annual financial report is often minimal. It includes the three
primary financial statements -- the balance sheet, income statement and
statement of cash flows. There's generally no letter from the chief executive,
no photographs, no charts.

In contrast, the annual report of a publicly traded company has more bells and
whistles to it. There are also more requirements for reporting. These include
the management discussion and analysis (MD&A) section that presents the top
managers' interpretation and analysis of the business's profit performance and
other important financial developments over the year.

Another section required for public companies is the earnings per share (EPS).
This is the only ratio that a public business is required to report, although
most public companies report a few others as well. A three-year comparative
income statement is also required.

Many publicly owned businesses make their required filings with the SEC, but
they present very different annual financial reports to their stockholders. A
large number of public companies include only condensed financial information
rather than comprehensive financial statements. They will generally refer the
reader to a more detailed SEC financial report for more specifics.

What are other ratios used in financial reporting

The dividend yield ratio tells investors how much cash income they're receiving
on their stock investment in a business. This is calculated by dividing the
annual cash dividend per share by the current market price of the stock. This
can be compared with the interest rate on high-grade debt securities that pay
interest, such as Treasure bonds and Treasury notes, which are the safest.

Book value per share is calculated by dividing total owners' equity by the
total number of stock shares that are outstanding. While EPS is more important
to determine the market value of a stock, book value per share is the measure
of the recorded value of the company's assets less its liabilities, the net
assets backing up the business's stock shares. It's possible that the market
value of a stock could be less than the book value per share.

The return on equity (ROE) ratio tells how much profit a bus8iness earned in
comparison to the book value of its stockholders' equity. This ratio is
especially useful for privately owned businesses, which have no way of
determining the current value of owners' equity. ROE is also calculated for
public corporations, but it plays a secondary role to other ratios. ROE is
calculated by dividing net income by owners' equity.

The current ratio is a measure of a business's short-term solvency, in other
words, its ability to pay it liabilities that come due in the near future. This
ratio is a rough indicator of whether cash on hand plus the cash to be collected
from accounts receivable and from selling inventory will be enough to pay off
the liabilities that will come due in the next period. It is calculated by
dividing the current assets by the current liabilities. Businesses are expected
to maintain a minimum 2:1 current ratio, which means its current assets should
be twice its current liabilities.

What is acid test ratio and ROA ratio?

Investors calculate the acid test ratio, also known as the quick ratio or the
pounce ratio. This ratio excludes inventory and prepaid expenses, which the
current ratio includes, and it limits assets to cash and items that the
business can quickly convert to cash. This limited category of assets is known
as quick or liquid assets. The acid-text ratio is calculated by dividing the
liquid assets by the total current liabilities.

This ratio is also known as the pounce ratio to emphasize that you're
calculating for a worst-case scenario, where the business's creditors could
pounce on the business and demand quick payment of the business's liabilities.
Short term creditors do not have the right to demand immediate payment, except
in unusual circumstances. This ratio is a conservative way to look at a
business's capability to pay its shortterm liabilities.

One factor that affects the bottom-line profitability of a business is whether
it uses debt to its advantage. A business may realize a financial leverage
gain, meaning it earns more profit on the money it has borrowed than the
interest paid for the use of the borrowed money. A good part of a business's
net income for the year may be due to financial leverage. The ROA ratio is
determined by dividing the earnings before interest and income tax (EBIT) by
the net operating assets.

An investor compares the ROA with the interest rate at which the corporation
borrowed money. If a business's ROA is 14 percent and the interest rate on its
debt is 8 percent, the business's net gain on its capital is 6 percent more
than what it's paying in interest.

ROA is a useful ratio for interpreting profit performance, aside from
determining financial gain or loss. ROA is called a capital utilization test
that measures how profit before interest and income tax was earned on the total
capital employed by the business.

What are independent auditors?

Indpendent CPA auditors are like referees in the financial reporting arena. The
CPA comes in, does an audit of the business's accounting system and methods and
gives a report that is attached to the company's financial statements. Publicly
owned businesses are required to have their annual financial reports audited by
independent CPA firms and any privately owned businesses have audits done as
well because they know that an audit report will add credibility to their
financial reports.

An auditor judges whether the business's accounting methods are in accordance
with generally accepted accounting principles (GAAP). Generally everything is
in place and the financial report is a reliable document. But at times an
auditor will wave a yellow or red flag. Some indicators of potential trouble
include when the business's capability to continue normal operations is in
doubt because of what are known as financial exigencies, which could mean a low
cash balance, unpaid overdue liabilities, or major lawsuits that the business
doesn't have the cash to cover.

An auditor must exercise professional skepticism, meaning the auditor should
challenge the accounting methods and reporting practices of the client in order
to make sure that its financial statement conform with accounting standards and
are not misleading -- in short, that the financial statement are fairly
presented. Indeed, the words "fairly presented" are the exact words used in the
auditor's report.

A good auditor need technical know-how, but also needs to know how to be tough
on the accounting methods of the client. His job is to be the agent of the
shareholders and other users of the business's financial report. It's incumbent
on an auditor to strictly uphold GAAP, and not let any irregularities slide.

There are a number of well-known companies that engaged in accounting fraud
recently and that fraud was not discovered by the CPA auditors. Enron is one of
these companies. In this case, the auditing firm, Arthur Anderson was found
guilty of obstruction of justice because it destroyed audit evidence.

What is accounting fraud?

Accounting fraud is a deliberate and improper manipulation of the recording of
sales revenue and/or expenses in order to make a company's profit performance
appear better than it actually is. Some things that companies do that can
constitute fraud are:

-- Not listing prepaid expenses or other incidental assets
-- Not showing certain classifications of current assets and/or liabilities
-- Collapsing short- and long-term debt into one amount.

Over-recording sales revenue is the most common technique of accounting fraud.
A business may ship products to customers that they haven't ordered, knowing
that those customers will return the products after the end of the year. Until
the returns are made, the business records the shipments as if they were actual
sales. Or a business may engage in channel stuffing. It delivers products to
dealers or final customers that they really don't want, but business makes
deals on the side that provide incentives and special privileges if the dealers
or customers don't object to taking premature delivery of the products. A
business may also delay recording products that have been returned by customers
to avoid recognizing these offsets against sales revenue in the current year

The other way a business commits accounting fraud is by under-recording
expenses, such as not recording depreciation expense. Or a business may choose
not to record all of its cost of goods sold expense fore the sales made during
a period. This would make the gross margin higher, but the business's inventory
asset would include products that actually are not in inventory because they've
been delivered to customers.

A business might also choose not to record asset losses that should be
recognized, such as uncollectible accounts receivable, or it might not

write down inventory under the lower of cost or market rule. A business might
also not record the full amount of the liability for an expense, making that
liability understated in the company's balance sheet. Its profit, therefore,
would be overstated.

What does an audit do?

If a business breaks the rules of accounting and ethics, it can be liable for
legal sanctions against it. It can deliberately deceive its investors and
lenders with false or misleading numbers in its financial report. That's where
audits come in. Audits are one means of keeping misleading financial reporting
to a minimum. CPA auditors are like highway patrol officers who enforce traffic
laws and issue tickets to keep speeding to a minimum. An audit exam can uncover
problems that the business was not aware of.

After completing an audit examination, the CPA prepares a short report stating
that the business has prepared its financial statements, according to generally
accepted accounting principles (GAAP), or where it has not. All businesses that
are publicly traded are required to have annual audits by independent CPAs.
Those companies whose stocks are listed on the New York Stock Exchange or
Nasdaq must be audited by outside CPA firms. For a publicly traded company, the
expense of conducting an annual audit is the cost of doing business; it's the
price a company pays for going into public markets for its capital and for
having its shares traded in the public venue.

Although federal law doesn't require audits for private businesses, banks and
other lenders to private businesses may insist on audited financial statements.
If the lenders don't require audited statements, a business's owners have to
decide whether an audit is a good investment. Instead of an audit, which they
can't really afford, many smaller businesses have an outside CPA come in on a
regular basis to look over their accounting methods and give advice on their
financial reporting. But unless a CPA has done an audit, he or she has to be
very careful not to express an opinion of the external financial statements.
Without a careful examination of the evidence supporting the amounts reported
in the financial statements, the CPA is in no position to give an opinion on
the financial statements prepared from the accounts of the business.

What does an audit report contain?

Most audit reports on financial statements give the business a clean bill of
health, or a clean opinion. At the other end of the spectrum, the auditor may
state that the financial statements are misleading and should not be relied
upon. This negative audit report is called an adverse opinion. That's the big
stick that auditors carry. They have the power to give a company's financial
statements an adverse opinion and no business wants that. The threat of an
adverse opinion almost always motivates a business to give way to the auditor
and change its accounting or disclosure in order to avoid getting the kiss of
death of an adverse opinion. An adverse audit opinion says that the financial
statements of the business are misleading. The SEC does not tolerate adverse
opinions by auditors of public businesses; it would suspend trading in a
company's stock share if the company received an adverse opinion from its CPA
auditor.

One modification to an auditor's report is very serious -- when the CPA firm
says that it has substantial doubts about the capability of the business to
continue as a going concern. A going concern is a business that has sufficient
financial wherewithal and momentum to continue it normal operations into the
foreseeable future and would be able to absorb a bad turn of events without
having to default on its liabilities. A going concern does not face an imminent
financial crisis or any pressing financial emergency. A business could be under
some financial distress but overall still be judged a going concern. Unless
there is evidence to the contrary, the CPA auditor assumes that the business is
a going concern. If an auditor has serious concerns about whether the business
is a going concern, these doubts are spelled out in the auditor's report.

Careers

There are many different careers in the field of accounting ranging from
entry-level bookkeeping to the Chief Financial Officer of a company. To achieve
positions with more responsibility and higher salaries, it's necessary to have a
degree in accounting as well as achieve various professional designations.

One of the primary milestones in any accountant's career is to become a
Certified Public Accountant or CPA. To become a CPA you have to go to college
with a major in accounting. You also have to pass a national CPA exam. There's
also some employment experience required in a CPA firm. This is generally one
to two years, although this varies from state to state. Once you satisfy all
those requirements, you get a certificate that designates you as a CPA and
you're allowed to offer your services to the public.

Many CPAs consider this just one stepping stone to their careers. The chief
accountant in many offices is called the controller. The controller is in
charge of managing the entire accounting system in a business stays on top of
accounting and tax laws to keep the company legal and is responsible for
preparing the financial statements.

The controller is also in charge of financial planning and budgeting. Some
companies have only one accounting professional who's essentially the chief
cook and bottle washer and does everything. As a business grows in size and
complexity, then additional layers of personnel are required to handle the
volume of work that comes from growth. Other areas in the company are also
impacted by growth, and it's part of the controller's job to determine just how
many more salaries the company can pay for additional people without negatively
impacting growth and profits.

The controller also is responsible for preparing tax returns for the business;
a much more involved and complex task than completing personal income tax
forms! In larger organizations, the controller can report to a vice president
of finance who reports to the chief financial officer, who is responsible for
the broad objectives for growth and profit and implementing the appropriate
strategies to achieve the objectives.

How is accounting used in business?

It might seem obvious, but in managing a business, it's important to understand
how the business makes a profit. A company needs a good business model and a
good profit model. A business sells products or services and earns a certain
amount of margin on each unit sold. The number of units sold is the sales
volume during the reporting period. The business subtracts the amount of fixed
expenses for the period, which gives them the operating profit before interest
and income tax.

It's important not to confuse profit with cash flow. Profit equals sales
revenue minus expenses. A business manager shouldn't assume that sales revenue
equals cash inflow and that expenses equal cash outflows. In recording sales
revenue, cash or another asset is increased. The asset accounts receivable is
increased in recording revenue for sales made on credit. Many expenses are
recorded by decreasing an asset other than cash. For example, cost of goods
sold is recorded with a decrease to the inventory asset and depreciation
expense is recorded with a decrease to the book value of fixed assets. Also,
some expenses are recorded with an increase in the accounts payable liability
or an increase in the accrued expenses payable liability.

Remember that some budgeting is better than none. Budgeting provides important
advantages, like understanding the profit dynamics and the financial structure
of the business. It also helps for planning for changes in the upcoming
reporting period. Budgeting forces a business manager to focus on the factors
that need to be improved to increase profit. A well-designed management profit
and loss report provides the essential framework for budgeting profit. It's
always a good idea to look ahead to the coming year. If nothing else, at least
plug the numbers in your profit report for sales volume, sales prices, product
costs and other expense and see how your projected profit looks for the coming
year.

Profit and Loss

It might seem like a no-brainer to define just exactly what profit and loss
are. But of course these have definitions like everything else. Profit can be
called different things, for a start. It's sometimes called net income or net
earnings. Businesses that sell products and services generate profit from the
sales of those products or services and from controlling the attendant costs of
running the business. Profit can also be referred to as Return on Investment, or
ROI. While some definitions limit ROI to profit on investments in such
securities as stocks or bonds, many companies use this term to refer to
short-term and long-term business results. Profit is also sometimes called
taxable income.

It's the job of the accounting and finance professionals to assess the profits
and losses of a company. They have to know what created both and what the
results of both sides of the business equation are. They determine what the net
worth of a company is. Net worth is the resulting dollar amount from deducting a
company's liabilities from its assets. In a privately held company, this is also
called owner's equity, since anything that's left over after all the bills are
paid, to put it simply, belongs to the owners. In a publicly held company, this
profit is returned to the shareholders in the form of dividends. In other words,
all liabilities have the first claim on any money the company makes. Anything
that's left over is profit. It's not derived from one element or another. Net
worth is determined after all the liabilities are deducted from all the assets,
including cash and property.

Showing a profit, or a positive figure on the balance sheet, is of course the
aim of every business. It's what our economy and society are built on. It
doesn't always work out that way. Economic trends and consumer behaviors change
and it's not always possible to predict these and what income they'll have on a
company's performance. Bookkeeping Basics

Most people probably think of bookkeeping and accounting as the same thing, but
bookkeeping is really one function of accounting, while accounting encompasses
many functions involved in managing the financial affairs of a business.
Accountants prepare reports based, in part, on the work of bookkeepers.

Bookkeepers perform all manner of record-keeping tasks. Some of them include
the following:

- They prepare what are referred to as source documents for all the operations
of a business -- the buying, selling, transferring, paying and collecting. The
documents include papers such as purchase orders, invoices, credit card slips,
time cards, time sheets and expense reports. Bookkeepers also determine and
enter in the source documents what are called the financial effects of the
transactions and other business events. Those include paying the employees,
making sales, borrowing money or buying products or raw materials for
production.

- Bookkeepers also make entries of the financial effects into journals and
accounts. These are two different things. A journal is the record of
transactions in chronological order. An accounts is a separate record, or page
for each asset and each liability. One transaction can affect several accounts.

- Bookkeepers prepare reports at the end of specific period of time, such as
daily, weekly, monthly, quarterly or annually. To do this, all the accounts
need to be up to date. Inventory records must be updated and the reports
checked and double-checked to ensure that they're as error-free as possible.

- The bookkeepers also compile complete listings of all accounts. This is
called the adjusted trial balance. While a small business may have a hundred or
so accounts, very large businesses can have more than 10,000 accounts.

- The final step is for the bookkeeper to close the books, which means bringing
all the bookkeeping for a fiscal year to a close and summarized.

Personal Accounting

If you have a checking account, of course you balance it periodically to
account for any differences between what's in your statement and what you wrote
down for checks and deposits. Many people do it once a month when their
statement is mailed to them, but with the advent of online banking, you can do
it daily if you're the sort whose banking tends to get away from them.

You balance your checkbook to note any charges in your checking account that
you haven't recorded in your checkbook. Some of these can include ATM fees,
overdraft fees, special transaction fees or low balance fees, if you're
required to keep a minimum balance in your account. You also balance your
checkbook to record any credits that you haven't noted previously. They might
include automatic deposits, or refunds or other electronic deposits. Your
checking account might be an interest-bearing account and you want to record
any interest that it's earned.

You also need to discover if you've made any errors in your recordkeeping or if
the bank has made any errors.

Another form of accounting that we all dread is the filing of annual federal
income tax returns. Many people use a CPA to do their returns; others do it
themselves. Most forms include the following items:

Income -- any money you've earned from working or owning assets, unless there
are specific exemptions from income tax.

Personal exemptions -- this is a certain amount of income that is excused from
tax.

Standard deduction -- some personal expenditures or business expenses can be
deducted from your income to reduce the taxable amount of income. These
expenses include items such as interest paid on your home mortgage, charitable
contributions and property taxes.

Taxable income -- This is the balance of income that's subject to taxes after
personal exemptions and deductions are factored in.

Making a Profit

Accountants are responsible for preparing three primary types of financial
statements for a business. The income statement reports the profit-making
activities of the business and the bottom-line profit or loss for a specified
period. The balance sheets reports the financial position of the business at a
specific point in time, ofteh the last day of the period. and the statement of
cash flows reports how much cash was generated from profit what the business
did with this money.

Everyone knows profit is a good thing. It's what our economy is founded on. It
doesn't sound like such a big deal. Make more money than you spend to sell or
manufacture products. But of course nothing's ever really simple, is it? A
profit report, or net income statement first identifies the business and the
time period that is being summarized in the report.

You read an income statement from the top line to the bottom line. Every step
of the income statement reports the deduction of an expense. The income
statement also reports changes in assets and liabilities as well, so that if
there's a revenue increase, it's either because there's been an increase in
assets or a decrease in a company's liabilities. If there's been an increase in
the expense line, it's because there's been either a decrease in assets or an
increase in liabilities.

Net worth is also referred to as owners' equity in the business. They're not
exactly interchangeable. Net worth expresses the total of assets less the
liabilities. Owners' equity refers to who owns the assets after the liabilities
are satisfied.

These shifts in assets and liabilities are important to owners and executives
of a business because it's their responsibility to manage and control such
changes. Making a profit in a business involves several variable, not just
increasing the amount of cash that flows through a company, but management of
other assets as well. A Career in Accounting: Tips on How You Can be Successful

In any type of businesses, an accountant is needed. You have to consider that
accounting is basically the language in business and having enough knowledge
about accountancy is essential for businessmen and women to know how their
business is doing. This is why accounting professionals are very much in demand
today. And, a lot of certified accountants have become quite successful in their
field and some have even started their own business.

The great thing about this career is that it will enable you to interact with
all levels of business and you will also learn a lot from it.

So, just what does it take to become an accountant and follow this career?

First of all, you need to know about the eligibility in becoming an accountant.

You need to be a graduate in a 4 year bachelor's degree in accountancy or any
related field. Aside from this, an accountant should be able to have good
analytical and technical expertise in business systems. Good mathematical
aptitude is also a must-have for accountants. And, because computers are now
one of the most used medium in computing, you should also have knowledge and
the operating skills of a computer.

Another requirement is that you will need a bachelor's degree with a minor in
another subject. This should be taken from an accredited college or university
in order for you to apply for Master's in accounting.

You can also pursue this career if you had your course in accounting over
distance learning programs or through the internet.

Also, you will need an accreditation or license of certain organization, such
as being a CPA should have a license by the STA or the State Board of
Accountancy.

Most companies also require that you should complete a number of semester hours
as well as work hours, which are considered for a 4-year bachelor's degree. If
you become a public accountant, you will be taken as a trainee. You will
usually start your career as a junior internal auditor or as cost accountant.

It is recommended that you should have a master's degree in business
administration or an MBA because it is preferred by more companies who are
looking for accountants as part of their employees

The great thing about pursuing accountancy as a career is that it presents a
lot of career opportunities. For example, you can get a job as auditors or
accountants in government offices or in private companies even if you do not
have any license.

During the course of your career, you can even get promoted to a position, such
as the chief financial officer position which presents a lot more great
opportunities for your career.

You can also work in the legal office. You can work as an auditor, a financial
officer, a budget analyst, a management accountant, and even as a tax
accountant. Most companies that are looking for tax accountants will prefer
accountants with legal background.

Forensic accounting is another promising career for accountants. Here, you will
investigate crimes, such as fraud in company's finances.

If you have a knack for teaching, you can teach a subject related to
accountancy in college. This is a great career option and many accountants feel
that this job is really fulfilling.

Just remember that in this profession, you have to start slow. If you are just
beginning a career as an accountant, try to start as a trainee and work your
way up to the career path that you want to take.

Accounting or accountancy career is a very promising career that presents a lot
of great opportunities. You can be sure that you will find the right career that
you want if you take this type of career.

About the California Board of Accountancy

The California Board of Accountancy is under the California Department of
Consumer Affairs, and was established in 1901 by the California Accountancy
Act. The California Board of Accountancy was created by the California
government in order to protect California residents from fraudulent
representation by public accountants. Since it's inception, the California
Board of Accountancy has been responsible for licensing of California Certified
Public Accountants as well as California Public Accountants.

The California Board of Accountancy is not only responsible for the licensing
of California certified public accountants and California public accountants.
The California Board of Accountancy is also responsible for making sure that
candidates for the Uniform Certified Public Accountant Examination are
qualified to take the examination and apply for a license from the California
Board of Accountancy.

The California Board of Accountancy is also responsible for the regulation and
registration of California certified public accountants partnerships and
California public accountant partnerships, as well as California corporate
partnerships.

Being charged with protecting California consumers, the California Board of
Accountancy also has the authority to receive and investigate complaints of
fraudulent or unethical activity against California consumers by California
certified public accountants and California public accountants. In order to
discipline certified public accountants and public accountants that violate
Board statutes and regulations, the California Board of Accountancy may suspend
a license, revoke a license, or place the licensee on a probationary period. The
terms of the probation can vary based on the Board's decision and the facts of
the case. Standard probationary terms are included in every act of discipline
within the California Board of Accountancy. However, additional terms may be
required during the probationary period if the California Board of Accountancy
deems it necessary based on the facts of the case.

As a part of the authority and responsibility to monitor and discipline
certified public accountants and public accountants, the California Board of
Accountancy may monitor the compliance of certified public accountants and
public accountants within California to ensure that continuing education
requirements are met by all California licensees. This monitoring may also
include examining the work of California certified public accountants and
California public accountants. The examinations performed by the California
Board of Accountancy are traditionally in the form of an audit of the certified
public accountant or the public accountant records and financial statements.

The California Board of Accountancy is unique in several ways. First, the
California Board of Accountancy examines and licenses more than 75,000
licensees, which is the largest group of licensed accountants in the nation.
The California Board of Accountancy is also unique in that it has the ability
to regulate not only individuals, but also California based firms.

As you can see, consumers in California are well protected from fraud,
embezzlement, and other accountancy crimes that may occur when utilizing the
services of a certified public accountant or public accountant. More so than
any other state in the United States of America, the California Board of
Accountancy certainly lives up to its mission of protecting California
consumers, and regulating accountancy in California.

Accountancy Auditing Careers

Within the field of accounting, there are a lot of career choices and
accountancy auditing careers is just one. Auditing is very important and it is
considered as an integral part of business finances. Auditors are greatly
needed to examine, analyze, and verify the business finances.

The Bureau of Labor claims that accountancy auditors are in-demand at present
and in the years to come. Employment of auditors is expected to increase
eventually. If you're still looking for an accountancy career, you might want
to consider working as a company auditor.

What is an auditor? Auditors are also accountants. However, they primarily deal
with examining and corroborating financial statements. The various statements
are examined closely and the auditors make sure that everything will 'add up'.
Sometimes, inaccuracies and errors occur. The task of the auditor is to
determine where these inaccuracies or errors exist. Aside from that, auditors
develop certain courses of action to avoid future errors.

If you think that the task of the auditor is simply scrutinizing financial
statements, you're quite wrong. Auditors examine the various company bills and
they ensure debit and credit accuracy. Errors are immediately corrected to
avoid financial problems.

Government auditors are different from non-government auditors. You see, they
are the ones who examine from different perspective -- the tax perspective.
Some filed tax returns are suspicious and so the task of the government
auditors is to conduct an audit on the individual or business entity and check
if it's accurate. A very good example is a business who filed a tax return,
claiming that they incurred many expenses.

IRS auditors will then check the said expenses to ensure that it meets the tax
code criteria. If it does not meet the criteria, the company can be given
penalties. Most tax auditors have bad reputations but they deserve more than
that. You see, being a government auditor is among the top accountancy careers
because they make sure that the people are honest enough to file their tax
returns and that the government will not be cheated.

An accountancy career is technology driven. Many years ago, auditors work
manually but nowadays, it's a lot different. Present-day auditors should know
how to work with computers and complicated accounting software or programs.
This is the only way to keep up with technology and to stay competitive in the
market.

If you want to become a company auditor someday, you have to graduate with a
bachelor's accounting degree. Certifications are oftentimes needed although
some states don't require it. More job opportunities are open to those who
earned a Master's degree as well as some certification.

Salary is a very important consideration when choosing a career. Auditors are
earning a yearly salary of about $54,000. Senior auditors receive higher
salaries which can reach as high as $80,000 per year. However, if you're a new
auditor, you can earn about $35,000 per year. You see, accountancy careers let
you earn big money.

Starting salaries are reasonable and don't you worry because after a several
years, your salary will definitely increase. If accounting is your passion,
choose an accountancy auditing career. Despite the bad reputations of auditors,
you should still believe in yourself and that you're going to have a decent job
that let's you earn reasonable salary.

Who cares what other people say; the important thing is that you're doing an
excellent job.

Accountancy Career Change

There are times when you suddenly feel that there is a need to change your
career path. If you are not satisfied with your present work, you have to
decide the right career path to take. Life is too short and you should be doing
a work that you truly love and enjoy.

There are various reasons why many individuals want to make a career change.
Perhaps you find your job boring lately because of the low salary or you have
higher ambition that you want to fulfill; well, whatever the reasons are, you
can make that change in your life and you shouldn't even fret about it. You
see, nowadays, there are a lot of employment options and opportunities. You can
already secure a high paying job for as long as you qualify and did you know
that an accountancy career might be good for you?

Even if you're not a graduate of an accounting degree, you can become an
accountant. That's not a lie but that can only happen if you're willing to
study again. You're never too old to go to school. If you're an undergraduate
or you've taken a business-related course, you can pursue your college
education in accounting. Those who have taken business-related courses can
easily shift to accountancy because some of their subjects in college can be
credited. They will only be taking the necessary units in order to finish the
degree. Although it might take a few more years, the rewards can make your head
spin. Be patient and don't hesitate to gain more knowledge.

There are thousands or even millions of people out there who have decided to
make a career change. If you're planning to do the same thing, it's a good
feeling to know that you're not alone in your quest.

But before you make that 'big' career change, here are a few things to ponder.

1. You have to ask yourself why you want to change your career. Even if you can
name a lot of reasons why you want to leave your old job, that will not help in
making a good decision. What you must do is to identify the aspects of
accounting (if you plan to make an accountancy career change). If you think
that you have the qualities of an accountant and you feel that you can be
creatively and commercially expanded, go ahead. Does the thought of math
figures and numbers excite you?

2. Suppose the reason why you want to leave your job is the low salary, an
accountancy career can give you a high salary. You see, starting salaries of
accountants is usually around $35,000 per year. It increases as years go by.
But you must remember that you can enjoy these salary benefits if you finished
a degree in accounting.

3. Get to know people who are in the accounting industry. You can conduct some
research to determine the necessary skills required, how business accounting
works, and many more information.

Changing a career to accountancy can alter your life forever. You have to come
up with a responsible and conscious decision. Once you're already in the
accountancy profession, you have to work carefully and diligently.

Keep yourself motivated because you will surely experience set-backs. If you
can overcome these things, nothing vcan stop you in doing your job efficiently.

Accountancy Career: The Reasons Why You Should Choose Accounting

Accounting or accountancy is one of the best careers available today.
Accountants are always on demand and the fields or jobs that you can choose
from are huge. This means that there are a lot of opportunities for having a
career as an accountant and you also have a lot of career choice to choose from.

In accounting, you will see that there are lots of things that you can benefit
from. Here, you will see that it will be able to help you gain experience in
the field of accounting as well as learn a lot about the inner workings of
businesses. It basically means that it will teach you on how to organize and
run your own business.

In fact, most successful entrepreneurs started out as accountants. The
knowledge they gained in this line of work eventually paid off and they are now
continuing to build a business empire. If you too would want to become like most
of the successful accountants today, then you will want to know the skills
required in accounting.

Basically, the required skills are not that high except for two areas. The
first is your analytical skills and the second is your computer skills.

If you compare the accounting field to other professions out there, you will
see that most of it will require a skill, such as having some type of attention
to detail as well as knowledge about computers. However, you have to remember
that in accounting, there are different skills and knowledge needed than the
rest of other professions.

Here, you don't need to know how to socialize with other people. You will work
in a self-pressure environment only and you also do not need a high amount of
initiative. It's not saying that accounting is much easier than other jobs, but
it just means that it is different. It basically separates this profession from
other types of careers.

The best feature in becoming an accountant is that you really don't need
special skills or talents in order to become one. Everything here can be
learned and developed.

In accounting, the best thing about it would probably be the great pay. In
fact, during your fist year as an accountant, it is very possible that you can
earn as much as 55 thousand dollars a year. After ten years in this kind of
career, you can be making money amounting to six figures. However, this can be
achieved with patience and with dedication to your work.

If you want success in this field in a faster way, then furthering your degree
in accounting is the way to go, such as becoming an MBA. Other types of careers
take a lot longer to receive accreditation and this is the reason why accounting
is a great career choice.

As you can see, it is not surprising why accounting is a very popular career
choice. Although a lot of people are considering this type of career, you can
be sure that you will never run out of jobs as an accountant as there are a lot
of fields in accounting that you can enter.

So, if you want to be successful and you are looking for a good career choice,
accounting or accountancy career can be your best choice, just remember to work
hard and you should be dedicated in this line of work. Accounting/Accountancy
Career: Steps to Success

If you have an ambition in pursuing a career in accounting or accountancy, then
you might want to start planning first before jumping into this field. This will
enable you to become successful in achieving your career goals in the accounting
field. Always remember that the first step to success is by having good
knowledge and making the right decisions. So, here are the steps to success in
order for you to become successful in your chosen career.

The first is that you should excel in math.

You have to remember that accounting is all about numbers and how to manipulate
it. Therefore, you have to make sure that you are good at math in high school. A
person who doesn't like math doesn't succeed in the accounting field. Take extra
attention on your math subjects and always ask your teachers and counselors for
guidance on which courses you must take if you plan on pursuing a career in
accounting. This will help you out in making a clear path for your goals.

The second thing that you have to do is request information from a college or
university you plan on attending about their accounting course offer.

Always remember that getting good education on your chosen course is very
important. In this case, you have to choose a college or university that can
offer you a solid education for their accountancy courses. Companies are
particularly choosy when it comes to the educational background of their
prospective accountants.

As mentioned before, information will get you well-prepared. So, the third
thing that you should do is research on the requirements for becoming a
Certified Public Accountant or a CPA. Although being a CPA is not required by
companies, it is preferred. If you want to stand out when you are applying as
an accountant in a company or an accounting firm, you might want to get
certified. Basically, in order to become a CPA, you will need to get a
bachelor's degree in accounting or in other courses related to business. By
knowing what is required, you will be become better prepared when you are going
to pursue a career in this field.

Also, if you are now going to start your first career or job, you will normally
do it in your own state after graduating. So, try to know if you fulfilled the
state requirements. If you don't, then you might get problems in starting your
accounting career in the future.

Computers are now used in most companies today. Because of this, you have to
know and become proficient with the different types of accounting software.
Everything today is now computerized and not knowing how to work an accounting
software program will lead to difficulty in finding jobs in the accounting
field.

Experience is very valuable. Having more will mean opening up more career
opportunities. So, try getting jobs that is related in the accounting field you
choose.

Being prepared for your future career is what you should be doing if you have
ambitions in starting a career in the accounting or accountancy field. By being
prepared, you can be sure that you will not run into any problems in the future
and ensure a smooth career path that can lead to your goals and success.

Accounting Auditing Careers

Within the accountancy field, there are several career choices and that
includes accounting auditing career. Auditors play a very important role
especially in the business industry. They perform various tasks that are
considered essential to the financial matters of any business.

A present, there is a great demand for company auditors and according to the
labor bureau, the demand will still increase in the coming years. There are
more employment opportunities in the accounting and if you still haven't
decided which career path to take, the accounting auditor career is an
excellent choice.

Before, accountants and auditors are usually seen wearing coats and ties but
due to the changes of today's modern times, the persona of these professions
have changed considerably. The auditing field alone is already on the brink of
unbelievable growth. If you really like crunching numbers and you have a
logical mind, auditing may be your thing.

Auditors are no longer considered as geeks or human calculators. Accountancy is
an evolving profession and it's no wonder why a lot of auditors nowadays are
statistically savvy and are very sharp when it comes to business matters.
Organizations and businesses are in great need of sharp and professional
auditors to track their expenses and remain federally compliant. Being an
auditor means that you're a person of big responsibility.

Qualified auditors and accountants can take advantage of the many job
opportunities in the market today. Government regulations and business
processes are getting more and more complex these days; because of this fact,
auditors are badly needed. How can you become an auditor?

Well, you need to finish a degree in accountancy and you also have to pass the
CPA exams. Since auditing is a specialized profession, there are still other
accreditations that you have to comply with. You can either study locally or
you can also try online colleges. Just make sure the online college is
accredited before you enroll.

Aside from online colleges, you can also get the necessary accreditations and
certificates online. Entry level and master's level certificates are now
available online; advanced degrees are also available. You simply have to surf
the internet to discover some of the opportunities that await you in order to
become a competent auditor someday.

Again, it was mentioned earlier that you need to pass certain examinations like
the CPA. How is that possible? Well, you simply have to prepare yourself. It's
just like taking your final exams in college. You should prepare your textbook
materials, conduct group studies, and even online class session.

You can even secure samples of test questions that can be given during the
exams. By doing so, you can easily pinpoint the specific areas that you're
still not good at; you have to study those weak areas so that when the day of
the exam arrives, you will be prepared.

Accounting auditing careers are very popular these days. So what are you
waiting for? If you think you posses the necessary qualifications and skills in
order to become a competent and responsible auditor, why don't you take up an
accounting course in college?

This is great news for incoming college students and for those who want to
shift careers. It's really up to you. You have to be determined so that one day
you can become a well-known auditor and many business and companies will be
after your services.

Accounting Careers: Promising Opportunities and Tips

Accounting or accountancy is one of the most promising types of profession
today. It is always in demand and the career opportunities here are huge. If
you are considering a profession as an accountant, then you will definitely see
that this will change your professional life.

First of all, you have to know how you can start in the accounting field. Here
are some tips that will be able to point you the right way to success.

The first thing that you have to do is decide on the field of accounting that
you are interested in. There are basically lots of different fields in the
accounting career and you will surely find the right one.

It is also a good idea to research about information related to accounting or
accountancy, such as the college or university you are going to take the course
in. You have to consider that companies are quite picky when it comes to the
college or university that accountants graduated in. Also, by doing this, you
will be able to know which college or university offers quality education
particularly on accountancy.

Try consulting accounting professionals and teachers who are knowledgeable
about the subject. They will be able to give you a lot of information coming
from their experience.

If you plan on pursuing a career in accounting, then you have to enroll in a
bachelor's degree in accounting. Even if you are good in accounting, you can
never have a good job if you don't have at least a bachelor's degree.

After graduating, don't set your ambitions too high. Always remember that
everyone starts small and work their way up to their goals. Start off as a
junior accountant or as a trainee. This will not only give you a chance in the
accounting career, but it will also provide you with valuable experience as
well as knowledge about accounting.

Always remember that accountancy is a continuing education. As much as
possible, you have to update your knowledge about accounting in order to keep
up with the standards of the industry.

As mentioned before, there are lots of career opportunities in accounting.
There are many fields of accounting and it is up to you to choose which one you
want to take on as a career.

After college, you will be able to qualify for a certified public accountant or
as registered public accountant license. Even though you can still get a job as
an accountant even if you don't have any license, you have to remember that
more opportunities will open up if you have one.

In this profession, you can become an auditor, a management consultant, a
financial officer, an analyst, and even as a tax accountant.

Being independent or being a freelancer in this field can also be a promising
career. However, you do need a good network of contacts in order for you to
earn more money and get more experience.

You can also try other specializations in accounting, such as forensic auditing
where you will be responsible for investigating crimes related to company's
finances as well as tax fraud.

Another great career choice for accountants is by simply becoming a teacher of
accounting. This is a very rewarding career choice.

As you can see, there are quite a lot of career opportunities for accounting or
accountancy. All you need to do is follow the mentioned tips and you can be sure
that you will be well on your way in to becoming a successful accountant in the
field you choose. Accounting Dictionary

Are you taking up an accounting course or are you already a graduate of
accountancy? It doesn't really matter whether you're a student or a
full-pledged accountant; you need to have an accounting dictionary with you.
You can even treat it like a bible.

You see, one can't possibly memorize all the accounting terms. Students and
fresh graduates have better memories. The accounting lessons are still fresh in
their minds. But what about those who graduated many years ago? To guide them in
their work, they have to get an accounting dictionary so that they will not be
lost in their lessons if ever they come across an unfamiliar accounting term.

Students and accounting professionals should have their own accounting
dictionary. That way, they can easily look up for the definition of a certain
term especially when they're unsure of the true meaning. You can't afford to
make mistakes in accounting because the success of the business rests on you
and your knowledge. One tiny mistake can lead to a wrong analysis and decision.

In choosing an accounting staff, the company should get only the best. You see,
accounting professionals will be the ones to analyze the financial situation of
the company. They have the power to influence business decisions. Therefore,
you must hire only the best and the most competitive employees. That way, you
can be sure that even when your back is turned, they are still doing their job.

Where can you find accounting dictionaries? You can easily purchase them in
bookstores worldwide. These dictionaries are not hard to find and for
accounting students, it is a must to have it. It can help you a lot in
mastering your lessons. If you can understand accounting terms with ease, all
the lessons will be a piece of cake.

Professional accountants often opt for online accounting dictionaries. Most
companies have internet connection in their offices. With the use of online
accounting dictionaries, accountants will just type the term that they would
like to find and the results are on the screen in seconds. They no longer have
to carry dictionary books because it can be found online.

Whether you're using a dictionary book or an online dictionary, what matters is
how you understand the various terms and definitions. By now, students and
professionals should have already mastered the different terms, but you can't
blame them if their memory fails once in a while. Nobody's perfect and that's a
fact that you need to accept. It also helps to have a handy accounting
dictionary especially if you need one.

If you prefer the online dictionary, you would have to choose among the many
websites online. Make sure that you choose a good site which can provide you
with a complete dictionary of accounting terms. Take note of the website so
that you won't have to search for it all over again.

If you opt for the dictionary book, you should also choose the one which has
the complete definition of accounting terms. Get the latest edition of the
dictionary so that the new terms can be found on it. The dictionaries don't
cost much; besides, you can still use it even after you graduate. Books are
great investments, so don't think that you're wasting money.

Always have a handy accounting dictionary with you to avoid mistakes in doing
your accounting works.

Accounting Software for Small Businesses

If you think that starting your own business is cakewalk, you're very wrong.
Aside from developing good products and services, you still need to sell them
to the market. One of the essential factors in running a business is
effectively managing finances. The language of any business, whether big or
small, is accounting.

The business scene is always loaded with work pressure. Therefore, there is an
unerring need for handling accounts and finances effectively. Even small
businesses need to be organized to achieve success and to do this the business
owner should get the appropriate accounting software. Business units usually
set long-term goals and to reach the goals, accounting management is required.
If you want to be your business' boss, you will need accounting software.
Manually doing all the accounting works can lead to a lot of errors which can
terribly affect any business.

As owner of a small business, you have to know where funds come from and where
it goes. If you decide to do accounting tasks manually, it can consume a great
portion of your time and it will be cumbersome on your part.

Here are some of the benefits that you will get in using an accounting software.

- You can finish all the accounting tasks promptly. You will be able to run
your small business without too much problems.

- You can be provided with correct reports as well as special tools to make
accounting tasks a lot simpler. That way, you can manage all the financial data
of the business effectively.

- In minutes, you can already manage the cash flow of the business.

- With the accounting software, it will now be possible to predict revenues,
bills, and generating reports.

These are some of the benefits of using an accounting software. However, don't
purchase the first accounting software that you come across. You see, there are
things to consider when selecting the proper accounting software for the
business. You have to determine the software's functionalities. It should be
user-friendly and most especially, it should resemble the paper counterparts so
that you can run the software smoothly. Once you're familiar with the software's
layout, you can already explore its functionalities.

If you can find software which combines the internet and e-commerce, the
better; you see, there are a great number of accounting software sold in the
market. If you want to enjoy all the benefits, you must be able to choose the
finest accounting software that is suited to your small business.

In choosing an accounting software, you need to consider the number of your
employees. You can find accounting software that is suited for small business
with less than 25 employees. Other software is suited for large businesses with
bigger numbers of employees.

A software that is suited for small businesses helps the business owner analyze
financial data, customize reports like transaction history, profit & loss, check
details, reconciliation details, and many more. By simply looking at the various
reports, you can already determine your business status. Some software also
offers built-in features like forecasting tools. These tools can be used to
manage business risks and control cost of operation.

If you're running a small business, it is now time to purchase accounting
software. By doing so, you can secure your business' future and you can be
certain that all your financial tasks are handled effectively.

Accounting Terms -- Profit & Loss and Other Terms

Different fields of study make use of certain terms that are not easily
understood by others. If you're an accounting student or a professional
accountant, you know the different terms used in accounting. One very popular
term is profit & loss.

So, do you know what the term means? To start with, you have to determine what
profit means. Profit can be referred to as net earnings or net income.
Businesses can either sell services or even products. Profit will come from the
sales of these services and products. If the costs of running a business are
controlled, it can add up to the profits.

Profits are also called ROI or return on investment. However, this term is
often limited to securities like bonds or stocks. But still, some companies use
ROI to mean short or long term business outcomes. Taxable income is another term
for profit.

The profit & loss of a certain company is determined by finance professionals
through accounting. They can determine what created the profits as well as the
losses. Accountants form some sort of business equation so justify the profits
& losses of a business. By doing so, they can easily tell a company's net worth.

It seems that by simply starting to define one accounting term, it eventually
leads to defining other terms as well. Net worth is another term that is quite
difficult to understand. It refers to the resulting amount after deducting the
liabilities of a company from the assets. Private companies refer to net worth
as owner's equity.

Why owner's equity? Well, after deducting all the liabilities, what's left
basically belongs to the owner. In the case of public companies, the profit of
the business is returned as dividends to shareholders. As you can see, before
owner or shareholders of a company can take hold of the profits, all
liabilities must be deducted first.

Every business aims to get a good and positive figure because that would mean
profit to them; if not, the business is at a loss. Societies and economies are
built on profit. However, there are times when a certain business incurs
losses. Consumer behaviors and economic trends change. Because of this fact, it
is not possible to foresee the company's future performance at all times.

How can you tell if a business is at a loss? That is understandable and even
those who have no background in accounting know what it means. All liabilities
will be deducted from the assets and if results to a negative amount, then the
business is at a loss. The accounting staff of the company can still pursue
effective measures to revive the business. If the business has efficient and
effective accounting staffs, the business can improve in the near future.

It cannot be argued that an accounting staff is needed to ensure the company's
success. Without them, the success of the business is not guaranteed. So the
owner of the business should choose the best accounting staff. That way, all
the financial transactions and decisions are noted and studied. Only then can
the company gain profits.

Profit & loss is just a simple accounting term. Aside from the term, you also
learned about net earnings, net income, net worth, dividends, etc.

Accounting

Are you very much interested in accounting? Well, if you are, you should take
up accounting education. By doing so, you will gain systematic knowledge about
the different practices and skills involved in accountancy and business.

What is the meaning of accounting? It is defined as the art of systematic
recording and analyzing of financial business transactions. The history of
acounting dates back many years ago. Accounting is already an essential part of
modern education. Every nation needs accounting because it is the key to
economic development.

If you want to pursue an accounting course, you should first choose a
university or college. There are local universities and colleges that you can
enroll in for an accounting course. If you prefer attending college abroad, you
may do so. But make sure that you choose the university or college wisely. You
also have to determine where you will stay when you're already there; you can
either stay at the dormitory or you can rent an apartment. Expenses are a great
consideration as well.

Accounting has four general areas, namely -- public, government, internal
auditing, and management accounting. If you choose an accounting course, you
will learn how to prepare and organize financial reports that include collation
or calculation of a range of figures, analyses, tax, and even projections.

Traditionally, the study of accounting focused mainly in the technical skills.
The traditional methods in the study of accounting include teaching the basic
principles and concepts of accounting. The present accounting practices haven't
adapted yet to the various changes in business, regulatory environment, and
economics. There are now modern methodologies used in accounting education.
These methodologies are based mainly on accounting communication,
decision-making, ethics, analytical skills, and the internal auditing
principles.

Educational programs in accounting have the same objectives and one is to teach
the students about the various accounting principles. Aside from that, the
students will also learn to develop their skills through various accounting
practices. Professional accountants today have greatly benefited from modern
accounting education. Accounting education also functions as an effective
management tool for business executives.

The educational components of an accounting education are specialized
accounting, general accounting, and professional accounting. These days,
accounting students can also take advantage of doctoral programs and other
continuing educational programs.

Is accounting education right for you? Before you finally enroll in an
accounting course, you have to be very sure that you like business matters. You
see, accounting is more on business matters and mathematical computations. It
also involves a lot of analyzing tasks.

Once you've decided that an accounting course if the best for you, find a
university or college now; you can either go to college abroad or you can
attend school locally. Every step involves making decisions. So make sure that
you make the best decisions because your future lies with it.

Once you start your accounting classes, you have to study all your lessons and
know them by heart. This is the only way to become a successful professional
someday. And of course, you need to pass all your exams so that you will soon
hold your diploma.

There are many career opportunities for accounting graduates. Again, if you
think that an accounting course is the best for you, enroll now. Study hard and
master the principles and concepts of accounting. Only by then can you say that
you're an effective and efficient accountant.

Advanced Accounting Career Training

Are you satisfied with your career right now? Don't you wish to move upwards or
be promoted? One way to develop your accounting career is by taking an advanced
accounting career training. You can even try taking up a different field if you
like but always remember to remain motivated in your present career.

When you finally decide to undergo advanced accounting career training, you
only have positive reasons in your mind. So what are these positive reasons?
There are various reasons but the most common are the following:

1. High chance of promotion. As mentioned earlier, one way to get promoted is
through training. You shouldn't stop learning even if you're already old. You
can expect career promotion to come your way after undergoing advanced career
training. By then, you will be ready to take new responsibilities.

2. Developing awareness in related fields. In accounting alone, there are
several career opportunities. If you keep yourself up to date, you will be able
to perform effectively and resourcefully. Know the recent developments in the
accounting field. Don't focus all your attention to your current career. You
have to look into other accounting careers so that you can be a well-rounded
employee.

3. Involvement in specialized trainings. Are there any benefits in being
involved in specialized trainings? The answer is a 'yes'. You see, if you
frequently attend specialized trainings, you become experienced and
highly-skilled. Therefore, your employer is bound to increase your salary in
the coming years.

4. Complete training courses. Have you taken a close look at your resume? By
taking up advanced accounting career training, you will be able to finish a
training course which you can later on put in your resume. Your resume will
surely stand out above others because of the advanced trainings you've attended.

Should you decide to change careers, it will be a lot easier because of the
various advanced trainings you have undergone. Still, if you're happy and
contented with your existing career, you can be promoted in the near future.
Your salary will increase and you're already prepared to take new
responsibilities. You will not find it hard to cope with the new working
environment.

Advanced accounting career training is an essential part of career development
and continuing education. Once you've accomplished the career training's key
components, you will be prepared at all times in case unforeseen events or
circumstances come your way.

For those individuals who practically hate their current jobs, why not take up
advanced career training in accounting? In just a week's time, you will be
ready to explore the accounting field. Don't hesitate to make changes if it's
going to create positive results. Accounting careers pay good money and with a
bit if dedication and hard work, you can be one of the top accountants in the
business industry.

You can use the internet to find free advanced accounting career training.
There are also paid trainings that you can choose from. For now, you have to
look for the specific career training that you would like to take. Do some
surfing on the net during your free time. You can even make a list of the top
five career trainings that you come across on the net.

Afterwards, you will simply have to choose one that you think is best. Good
luck in your trainings.

All About Charities

Many people donate to charities in order to take advantage of income tax
deductions at the end of the year. However, it is important to understand what
charities are eligible for these income tax deductions so that you do not miss
out on any income tax deductions that you can take. It is also important to
have a knowledge of what documentations you need to have in order to take the
income tax deductions from your donations to charitites.

Charities can include things such as school fundraisers, church fundraisers,
thrift store donations, donations to homeless shelters, donations to food
assistance programs such as Harvesters, and donations to other charities such
as hospital programs and women's shelters all qualify as charities for the
purpose of income tax deductions. However, there is documentation you need in
order to legally claim donations to these charities as income tax deductions.

Purchases from school fundraisers are usually accompanied by some type of
receipt or packing slip. Use this documentation to claim your income tax
deduction for these charities. Purchases and contributions to church
fundraisers do not typically come with any form of receipt, even though that
receipt is necessary in order to claim the donation to the charities as a legal
income tax deduction. Your best bet is to ask the church charities to provide
you with some type of written record, even on a piece of regular notebook
paper, indicated the amount of the donation. If your donation to these
charities is in the form of property or items rather than money, you can
estimate the reasonable value of the item and include that on the receipts from
the charities. This ensures that you have a reasonable and provable amount to
deduct from the donations to the charities for your income tax return.

Other types of charities typically provide receipts for donations to the
charities. If you donate items or property such as clothing, furniture,
vehicles, toys, or food you can estimate the value of the donation and receive
a receipt from the charities based on that amount that also lists what items
were donated, then use that receipt for your income tax deduction. If you
purchase something new to donate, you can keep your purchase receipt signed by
someone from the charities, and use that as a record of your contribution for
your income tax deduction.

Charities can always use your help. Deductions from charities does not get you
any extra money on your income tax return above and beyond what you spend.
However, these charities can use your valuable help, and with income tax
deductions for contributions to charities, you get everything you pay or give
to the charities back on your income tax return. So in short, you can give your
help to the different charities without it costing you a dime! No risk, you help
others, and you aren't out any money. It's a win-win situation for you and for
the charities!

Donate to your favorite charity today!

All About CMAs

A CMA is a Certified Management Accountant. This is different from a Certified
Public Accountant. A Certified Management Accountant is employed by a business
firm or a not-for-profit organization, and deal with private accounting.

A CMA can obtain employment by companies, government, and non-forprofit
entities. A CMA can obtain employment as a Bookkeeper, Payroll Clerk, General
Accountant, Budget Analyst, Cost Accountant, Internal Auditor, or Information
Technology Auditor. These CMA careers have starting salaries ranging from
$28,500 to $72,500, which is much higher than the salary range for CPAs.

A Bookkeeper does not need to have any certification, and therefore does not
have to be a CMA. A Payroll Clerk must have certification called Certified
Payroll Professional, or CPP, but does not need to be a CMA. A general
accountant or budget analyst may not be required to be a CMA, but many CMAs
begin as a general accountant or budget analyst. A Cost accountant must be a
CMA and be licensed by whatever state agency monitors and regulates accountancy
in that state. An Internal auditor must be a CMA and have an additional
certification as a certified internal auditor, or CIA. An Information
technology auditor must be a CMA and also have certified information system
auditor licensing, or CISA.

The certification program to become a CMA is sponsored by the Institute of
Management Accountants, or IMA. The CMA certification is proof of competence in
management accounting. To receive a CMA certification, you must have a college
degree, two years of experience, and pass a two day session of testing.

A CMA does not have the versatility of a CPA. Because a CMA works internally
within a firm, the duties given to a CMA are fairly rote, meaning that the CMA
does typically the same work each day. On the other hand, a CPA has as much
variety in type of work and work duties as the variety of his or her clients.
It is due to this fact that most accountants choose to obtain a CPA
certification and licensing rather than a CMA certification and licensing.

Most CMAs are cost accountants. A CMA cost accountant enters transactions into
accounting records like journals and ledgers. CMA cost accountants also prepare
financial statements. The financial statements that the CMA prepares are vital
to the business. The financial statements that the CMA prepares are used for
business decision making, investor decision making, competitive comparison, and
searching for industry trends. A CMA must also attempt to discover and correct
any errors in the cost accounting records. This can be done in a number of
ways, but is always very tedious for the CMA.

A CMA should be found if you are starting a business that will require
extensive and accurate bookkeeping and accounting. You can save a lot of money
in your business by hiring a CMA in house rather than using a CPA on a fee for
service basis. In this way, you are left free to run your business while
someone else worries about the accounting for your business.

All About Securities

Investing in securities is a great way to plan for your financial future. There
are a variety of securities available to invest in. But before you invest your
money into securities, there are several things you should know about investing
in securities, including the laws surrounding securities exchanges, where to go
for information about securities, and the agencies that regulate securities
exchanges.

The U.S. Securities Exchange Commission regulates all securities exchanges.
Many of the laws regarding investing in securities were placed into effect by
the U.S. Securities Exchange Commission, making their website the best place to
get information about investing in securities. On the website, you will find
information that will help you determine how best to invest your money in
securities, as well as information on the laws surrounding securities
exchanges. You will also find a warning on the U.S. Securities Exchange
Commission website that admonishes investors that investing in securities has
no guarantees, and is not a "spectator sport."

Laws governing the investments in securities are vital to consumer protection.
This is because the securities have no value except for what the companies
portray. If the companies are not regulated, they could make false claims and
misleading statements to get people to invest in their securities, which the
investors would then lose with the securities proved not to be valuable.

Probably the best resource for those wanting to invest in securities is the
Securities Industry and Financial Markets Association. The Securities Industry
and Financial Markets Association provides news, publications, and information
to those wanting information on investing in securities markets. On the
Securities Industry and Financial Markets Association website, you will find a
directory of securities, information about the securities industry, information
about government news related to securities, recent media related to securities,
current regulations on securities, research and surveys to help you choose
securities to invest in, last minute news that affects your investments in
securities, and a wealth of other securities resources.

Securities are typically purchased through a securities broker. To choose a
securities broker, you should carefully select the most trustworthy of
financial investment advisors to assist you in investing your money in
securities. You want to make sure that your securities broker has a proven
track record of success, and stays constantly up to date on their securities
information. This is vital to your securities investment, because it is only
through your broker that you can know when to sell your securities to avoid
losing money, or when to buy other securities in order to make money. The value
of securities can change drastically very quickly, and it takes a good broker to
keep you from losing out on your securities investment money.

When in doubt, you should always check the securities broker you plan to use
for your securities investment through local government agencies, as well as
the Better Business Bureau. These sources can let you know if there have been
any complaints against the securities broker you plan to use for your
securities investment.

All About Tax Deductions

Income tax time can be a dreadful season if you are not aware of all of the
income tax breaks you can get through income tax deductions. It is important to
understand what is tax deductible so that you can get as large of a tax refund
as possible.

Probably the most well known income tax deduction is the Earned Income Credit.
The earned income tax credit is available to those who make a minimum amount of
money and can file tax as single, married, or head of household. The more money
you made, the more your earned income tax credit is until you hit the peak,
which is around $30,000. Once you hit that peak, the earned income tax credit
goes down until you reach the maximum income allowed to receive the earned
income tax credit.

The second well known income tax deduction is the Child Tax Credit. The child
tax credit is available to you if you have two or more children in the home for
more than six months out of the year for which you are filing tax, and if you
have a tax liability. Through the child tax credit, you receive around $1000
per child. This total amount is then applied to your tax liability, and any
amount of child tax credit left over is made a part of your income tax refund.

Another income tax deduction is for child day care, when the child day care is
needed in order for one or both parents to work outside the home. This day care
income tax credit is equal to a percentage, up to a maximum amount, of the
actual day care expenses paid for that tax year.

Other expenses can also be tax deductible. Interest paid on a mortgage for the
primary residence can be claimed as an income tax deduction. Medical expenses
can also be claimed as an income tax deduction, although this is not very
helpful unless you have an excessive amount of medical expenses to deduct on
your income tax return. Tax paid to another state can be used as an income tax
deduction in the state that you live in. Donations and contributions to
charities, fundraisers, churches, etc. can also be tax deductible.

If you are self-employed, you can also claim business expenses as income tax
deductions. This includes any expenses directly related to running your
business. You can take a mileage income tax deduction for any miles you put on
your vehicle for business purposes. You can also take an income tax deduction
for your office space in your home if it is used only for business purposes in
the form of a portion of your rent, utilities, and phone bills. You can also
take an income tax deduction for your personal computer, printer supplies, and
other office supplies as long as you have the receipts for the tax deductible
expenses, and usage logs for the personal computer and other equipment to show
that it is used primarily for business.

As you can see, there are many income tax deductions available to you. If you
have any questions about what is tax deductible, you should contact a
qualified, certified, licensed tax accountant today.

All About Tax Planning

Tax planning is very important if you want to make sure that your income tax
return is filed quickly, effectively, accurately, and painlessly. Through
careful tax planning, you can have everything you need to file your income tax
return at your fingertips whenever you are ready to file. Tax planning is also
helpful in the case that your income tax return is brought up for audit by the
Internal Revenue Service.

Tax planning is essentially tracking your income tax deductible items as they
come up, and keeping records organized and handy in case they are needed. The
most important tool for tax planning is a small filing cabinet. You can use
this filing cabinet to file your tax planning documents and receipts, as well
as keep track of previous tax returns filed and other important documents such
as birth certificates and social security cards. The file cabinet you get to
use for your tax planning should be fire proof and have a lock. That way your
tax planning documents are safe in almost any disaster, and other people cannot
easily gain access to your tax planning and other important documents.

Part of tax planning is making sure that you are aware of what expenses are tax
deductible. You cannot engage in tax planning and track tax deductible expenses
if you don't know what you should be tracking! The Internal Revenue Service
offers many publications on this subject. However, if you have any questions
about income tax deductible items you should contact a qualified, certified,
and licensed tax professional.

Once you know what tax deductible expenses you will need to track for the
coming tax year, you need to set up tax planning record keeping system. This
can be a simple receipt book, expanding file, index cards, envelopes, or any
other method that makes sense to you. Keep in mind, however, as you engage in
tax planning, that your tax planning record keeping system should not only make
sense to you, but also make sense to your income tax preparer and the Internal
Revenue Service if necessary.

At the end of each month, you can add up the totals for the different types of
income tax deductible expenses you recorded in your tax planning records for
that month. This way, all you have to do to discover your tax deductible amount
is add up the totals for each month. The other records you collect and track
through your tax planning are simply for proof that you can claim these income
tax deductions, and are not really needed for preparing your income tax return
if you have all of your totals in order.

On the surface, income tax planning may seem complicated and difficult. But
with proper organization, tax planning is really quite easy. Not only that, but
when you engage in income tax planning, you better your chances for that larger
income tax refund that you need and deserve. If you have any questions about
tax planning, you should contact a tax planning professional tax accountant
today!

All About UK Accountancy

UK accountancy is somewhat different from American accountancy, in that there
are more regulatory standards for accounting in the UK than in America. In
America, companies must follow the Generally Accepted Accounting Principles
(GAAP) set down by the Financial Accounting Standards Board. The UK uses the
generally accepted accounting principles as a standard for accounting in UK
companies. However, there are other guidelines accountants in the UK must
consider.

UK accountants must also consider the International Financial Reporting
Standards (IFRS) set forth by the European Union (EU). These international
financial reporting standards were developed in an attempt to streamline the
financial reports from UK companies as well as companies in other European
nations. This makes financial reporting easier to understand by everyone. The
international financial reporting standards also allow UK businesses to more
easily compare their financial statements to those of companies in other
nations for the purpose of determining competition and industry standards.

In addition to the generally accepted accounting principles (GAAP) and the
international financial reporting standards (IFRS), UK businesses must also
adhere to UK law, such as the Companies Act 1985, as amended by the Companies
Act 1989. These UK laws incorporate both the GAAP and the IFRS, as well as
other European law. The UK Companies Act 1985 also requires UK companies to
file their accounts with the Registrar of Companies, which makes the financial
reports available to the UK and worldwide public.

The Companies Act 1985 will soon be superseded by the Companies Act 2006, which
is not yet in effect in the UK. This UK Companies Act 2006 will restate in
varying fashions the provisions laid down in the Companies Act 1985, and the
amendments of the Companies Act 1989. However, changes are being made to
incorporate the European Union's takeover of financial standards, and the laws
regarding international trade and financial reporting that are now necessary
for UK companies to follow. It will also put into codified law the UK common
law that was previously used in regards to UK companies and accountancy.

Any UK accountancy issues that require immediate attention but are not covered
by the generally accepted accounting principles (GAAP), international financial
reporting standards (IFRS), or Companies Act 1989 are brought before the Urgent
Issues Task Force. This group determines solutions to issues of UK accountancy,
and publish Abstracts which are binding immediately for UK companies. These
additional standards must also be followed by UK companies.

As you can see, accountancy in the UK is much more complex than that of the
United States of America. There are many UK laws, European Laws, and accounting
standards to follow for UK companies. While Americans must only adhere to the
generally accepted accounting principles (GAAP) set down by the Financial
Accounting Standards Board (FASB), UK companies must adhere also to the
International Financial Reporting Standards (IFRS) set down by the European
Union. If you have any question about standard accounting practices for UK
companies, you should contact an accountant to help you with your UK
accountancy as soon as possible.

Are You Ready for Tax Day?

Because deadlines are strict, and penalties will be given to late tax payments,
you should make sure that you do not put off your "tax day." You should
definitely start preparing your income tax return well before April 15. Whether
you are doing your own income tax return or you are getting the help of a
certified public accountant or firm to prepare your income tax return, you
should get a few things together before you begin or meet with the CPA.

The main thing you will need for your income tax return is proof of the income
you made and the taxes you paid in the previous year. That includes income made
through employers, interest from accounts, dividends from investments, income
made through self-employment, income made as a subcontractor, and any other
income. Student loans and other types of loans may also be considered income
for the purposes of income tax, as can winnings from a lottery, casino, or
other contest. If you are unsure what can be considered as income for tax
purposes, you should contact a certified public accountant.

The other thing that is important is social security numbers for everyone you
will claim on your income tax return. That includes social security numbers for
your spouse and any children you will claim. Without social security numbers,
proof of residence, and birth dates, you cannot claim deductions on your income
tax return for these individuals.

The next thing that you should gather is what you will need for deductions. If
you have a mortgage, your interest paid to the mortgage company may be tax
deductible. If you use a vehicle for business purposes, you can claim a tax
deduction for mileage. If you have children in daycare so that you can work,
you can claim a tax deduction for that expense. You can also claim tax
deductions for excessive medical expenses and charitable contributions.

If you are self-employed, you will need to also gather your receipts for tax
deductible expenses. A tax deductible business expense is any expense that is
used solely or primarily for the business you are involved in. The tax
deductible expense must be documented in order to claim it, so any receipts you
have, usage logs for computers and vehicles, etc. should be gathered so that you
can take the highest deduction possible. If you have any doubts about what is
tax deductible for your business, you should contact a certified public
accountant to assist you in your income tax preparation.

Once you have gathered all of the necessary tax documents, you must determine
which tax forms you need to file. If you are an individual with few tax
deductible items, you can file a simple tax return. However, if you are
self-employed you must also file a tax form called Schedule C. If you have a
lot of tax deductible items, you will want to file a more complex tax return to
itemize your tax deductions. If you are unsure what tax forms you need to file,
you should contact a certified public accountant to assist you in your income
tax return preparation.

Tax day can be a stressful time, but it doesn't have to be. Gather all of your
required tax documents as early as possible, and don't put off the inevitable.
Contact a certified public accountant as soon as you can if you are unsure what
tax forms you need to file, or what tax deductions you can take. And, most
importantly, don't panic on tax day! Career Opportunities in the Accounting
Field

Any type of business needs an accountant who will be responsible for keeping
records and also keep track of its income and assets over a period of time. In
this type of career, you will see that as an accountant, you will be able to
learn a lot of valuable things that can help you advance in this field. In
accounting or accountancy, it is important for you to know how businesses work
in order to have a full understanding on how you can do your job well.

In fact, a lot of successful businessmen and women today were former
accountants who were also working in a business that they didn't own but
decided to work their way up in the field.

The great thing about this career is that it will increase your knowledge on
how businesses work. You have to consider that accounting is sort of like a
continuing education. Even after you graduated from college and you are already
a certified accountant, you will still need to learn about the different changes
and trends in the business world in order for you to know what to do and what
not to do when owning businesses.

Accounting is basically the language of businesses.

In accounting, you will see that there will be a lot of career opportunities
that you can consider.

The first is public practice. Most accountants start their career as a
certified public accountant. In this career choice, you will be able to charge
a fee for your services or you can also work as a staff accountant or an
in-house accountant.

Basically, public accountants offer their services in partnerships. They offer
their services to individuals, as well as businesses and the government. You
need to remember that in order to become a public accountant, you need to be a
certified public accountant in order for you to work individually or as part of
an accounting firm.

Public accountants basically do jobs, such as taxation, auditing, as well as
management advisory services. You should remember that this particular career
is considered to be a stepping stone of most accountants. If you want to start
your career as an accountant, being a public accountant is usually the first
job that you have to take. Here, you will learn a lot of things about running a
business and you will also increase your experience.

Another great thing about being a public accountant early on in your accounting
career is that it provides a lot of great opportunities as it will give you lots
of experiences, and become more in demand by companies to handle their accounts
and income.

Accountants can also work as professors, or as researchers in schools or
colleges. They can also become reviewers. If you have a knack for teaching,
then this career path is for you. Although you won't directly get experience as
an accountant, you will see that this career path in accountancy can also
provide you with great opportunities.

You can also enter the government. Whether it is the local, state or federal
government, you will see that they will constantly have openings for accounting
jobs.

Being in the government can also produce a lot of great opportunities in your
field. It will let you meet important people who can help you in advancing in
your career and it will also provide you with great intensive training as an
accountant.

As you can see accounting or accountancy careers can provide you with a lot of
opportunities as an accountant.

Careers in Accountancy

There are a lot of different careers in the accountancy field. It ranges from
bookkeeping, auditing, until you reach the position of financial officer. As
the position title goes higher, you can expect higher salaries. However, in
order to achieve these positions and professional designations, you need to get
an accountancy degree.

One of the very important milestones in the life of an accountancy graduate is
becoming a CPA or Certified Public Accountant. How can you be a CPA? Firstly,
you need to finish college, majoring in accountancy. A CPA exam is conducted
and you have to pass it. If you want to be part of CPA firms, you need to
comply with certain employment experience and requirements which could take
about 2 years. after completion of the requirements, you will given a
certification as proof that you're already a CPA. Now, you can offer accounting
services to people.

Being a CPA is merely a stepping stone to an accountancy career. Controllers
are the chief accountants of certain companies and offices. They are in charge
of supervising the accounting system of the business. Controllers see to it
that the business follows tax laws to maintain its legality and they are also
responsible in preparing the business' financial statements.

Aside from the tasks mentioned earlier, controllers also take charge in
budgeting and financial planning. Businesses, big or small, need accountants.
However, in the case of very small businesses, owners can do the accounting
tasks. Bigger or larger businesses need accounting personnel to handle all the
accounting works. As the business expands, it needs to hire additional
employees. It is also the task of the accountant to determine if the company
can afford to hire additional employees without negatively affecting the growth
of profits.

Accounting involves a lot of paper work. Professional accountants need to
prepare tax returns which are very much complicated than income tax returns of
individuals. The chief accountant of the company is also responsible for
setting broad objectives for the company's growth and development. Their aim is
to gain more profits because this will be the proof for the success of the
business.

Being a CPA, a professional accountant, or a chief accountant are just few of
the many careers in accountancy. There are still other careers out there that
you can pursue for as long as you're a graduate of accountancy. How can you
find the many careers in accountancy?

That's very simple. You can start by logging on to the internet. There are
specialized websites that offers job opportunities in accountancy. You can
search these sites and find a job opening that you can qualify for. Make sure
that you send your complete resume to the employer or the employment agency. If
you do qualify for the job, you will be notified or informed.

In choosing among the careers in accountancy, you have to know your strong
points and weak points. That way, you can choose a career that best suits your
capability. You must always remember to choose a career that you like. If you
love your career, you will not ask for anything else; you will be contented.

Start now and look and look for a career in accountancy while you're still
young. New accountancy graduates are produced every year and so you mustn't
lose hope if you still don't have a career right now. Exert some effort and
time and soon you will have a rewarding career.

Church Accounting Software

The church is a respected institution since it commands the people's general
faith. It is always given utmost respect. The secular welfare and religious
functions of the church are performed through the faith of its constituents.
Church activities need funding and the funds come from Christians all over the
world. Are you aware that the Christian contributions can reach billions?

That's true and with such great amount of money, the church should make use of
accounting. One way to do this is through a church accounting software. The
church should be accountable for their people's money; church officials should
therefore monitor where all the money came from and where it is being spent.

The church is a large institution and so are its financial transactions. In
order to manage the accounts, the church will need a skilled force of financial
experts. However, that would mean additional cost to the church since they have
to pay for the services. It can consume so much time and money.

If the church doesn't want to hire a skilled force of financial experts, they
can simply make use of the church accounting software. Accounting experts
designed the software and it can assist church officials in managing finances.
The software engineers are already wellacquainted with the church's various
needs and so they can easily tailor-fit a certain church's software according
to its particular requirements.

The church accounting software is quite different from other software. Ordinary
accounting software is designed to suit the needs of modern businesses. The
church accounting software on the other hand focuses mainly on the necessities
of the institution. The church has no ambition or any financial interest.
Remember, the church is not being taxed by the government and so its
expenditure and resources takes a different curve altogether. Aside from that,
the church has several expenditure and income account heads.

Therefore, the church accounting software is designed to meet the various needs
of the institution and it still has room for customization since the needs of
the church also change as years go by.

If the church wants to handle all its financial transactions with ease, they
should get a church accounting software. By doing so, they can create account
statements, balance sheets, budget reports, print checks, maintain invoices,
record purchases, etc with ease.

But before anything else, the church representative who will purchase the
church accounting software should be knowledgeable. He or she must look into
the software's various features and carefully examine it. That person should
make sure that the software is flexible to respond to the church's ever
changing needs.

There's church accounting software in the market. The best place to purchase
the software is online. The internet can provide you with a lot of resources
regarding church accounting software. If you don't know much about it, you can
gather information first before you even shop for the software. It really helps
to know a bit of information about the software that you're going to purchase.

If your church needs the services of accountants, why not consider purchasing a
church accounting software? There is reasonably priced software out there; you
simply have to shop around first. You can even take advantage of free trials to
see if the software is good enough for the church's financial activities.

Don't wait until things get screwed up, organize all your financial
transactions.

Different Types Of Accountants

When you think of accountants, you probably just think there is only one type
of accountant. However this is a mistake that many people make about
accountants. Just like other professionals such as lawyers, there are different
fields that accountants can go into. The accounting industry is split into three
different types of accountants that perform various functions and have different
job duties and responsibilities. These different types of accountants are
specialized in different areas of accounting, which makes them expert
accountants in their own field of accounting.

The most popular type of accountants are public accountants. Public accountants
has the widest range of accounting, then any other type of accountant. Unlike
other types of accountants, public accountants can work for individuals,
businesses and organizations, as well as be utilized by government agencies.
There is no limit to who public accountants can work for, which is why public
accountants are the ideal accountants for job seekers in the accounting field.
A large amount of public accountants are self employed with some also working
for various CPA firms.

Public accountants also have a wide range of duties. They can be tax preparers,
consultants, financial strategists, or work hand in hand with law enforcement
agencies in the field of forensic accounting. There is virtually no limit to
what public accountants can do. However, there are laws that prevent public
accountants from performing multiple duties for the same clients, which is to
limit a public accountants power to a single group.

The next type of accountants are Cost accountants also known as management
accountants. These type of accountants are used in major businesses and
organizations and are essential to the functioning of a business. Cost
accountants do not have as many duties as public accountants, however, their
duties are of high value and extremely important. Cost accountants are in
charge of such things in a business as budgeting, giving continual evaluations
concerning the business, it s finances growth and liabilities as well as
financial information regarding costs and assets for the company. This is a
major role within a business or organization, which is why cost accountants are
valued by such groups. Without public accountants, businesses would not be able
to survive.

Government accountants are the last type of accountants. Governments
accountants have the most specific of duties then any other type of
accountants, which to to work in the bets interest of the government and the
public within that government. Government accountants not only keep track of
businesses records as well as the publics records, but they also ensure the
fulfillment of tax obligations. Government accountants also make sure that the
financial laws and regulations are being followed by businesses and individuals.

As you can see, the accounting field offers not only different fields for
accountants to go into, but it also offers many different options for
accountants to explore within those three classifications. Accountants hold a
high value within not only businesses, but also in our society as a whole. The
role on an accountant is essential to operate our financial needs.

Finding an Accounting Job

Now that you've finished your accounting course, it is time to find an
accounting job. A lot of young adults are now wondering where to find the
perfect job. They find it very difficult because there are not so many job
opportunities out there. But if you only know where to look, you can get a job
right away especially if you meet all the job qualifications.

When looking for a job, you should make use of all the available resources like
a headhunter or an employment service, the local papers, and of course, the
internet.

Consider the following tips when searching for an accounting job.

First step, log on to the internet. Job sites are all over the web and so you
can definitely find an accounting job there. Most of the sites

allow jobseekers to sort the job openings through location. After that, you can
simply search by using 'accounting' as the keyword. If you surf the net, you can
also find websites that focus mainly on accounting jobs. These sites can truly
help you in looking for the perfect accounting job. If you can find a job
online, then there's no need to check out other resources.

If the search for an accounting job online fails, your second step is to check
out local papers. Local companies who are in need of accounting graduates will
usually post an advertisement in the local paper and not on the internet. This
only means that you can also find jobs through the local papers.

Take a close look at the classified ads section. Find the section about
accounting jobs and there you have it. Sort through the job openings posted on
the paper; get the address of the company, and the requirements. All the
necessary contact information should be noted. Remember, you will be applying
directly to the company and not an employment agency unless stated.

Are you still not convinced with the local papers? Your third option is to
check with a headhunter or an employment agency. Find a good employment agency
that can help you in looking for a job. Some agencies ask for certain fees
while others offer their services for free. Clients pay these agencies to do
the interviewing process so there is a great chance for you to land a job
especially if you're qualified. Make sure that you find a reputable employment
agency.

So now, have you checked all these resources? Remember to start by surfing the
internet because this is the place where you can find a lot of job
opportunities. Then, check out the local papers and eventually, check the
employment agencies.

Now that you know the three valuable resources of job opportunities, all you
have to do now is to exert time and effort in looking for specific job
employments and you can already find a career. With a bit of patience, hard
work, and dedication, the accounting job that you've dreaming of will soon be a
reality.

Good luck in finding an accounting job. Make a comprehensive resume so that
your application is easily noticed. You see, every year, different colleges and
universities produce accounting graduates. You have to be competitive enough so
that you can land a job. If you just sit around and wait, nothing will happen.
If you want a job, act now.

Forensic Accounting

Is there such a thing as a forensic accountant? Well, you might find it hard to
believe but there are actually forensic accountants out there and it is a very
good profession. Forensic accounting is used in areas like litigation support
and investigative accounting.

Litigation support is very important and the forensic accountants play a very
important role in it. But before it can provide litigation support, forensic
accountants should first investigate the concerned company's financial
operations. After the investigation, the forensic accountants will prepare the
necessary information that will be used for filing civil or criminal court
cases.

These accountants spend most of their time in the concerned company or
enterprise. There they investigate, collect, and analyze all gathered financial
data. In order to be a forensic accountant, one should be well-versed with the
computer. You see, the analysis of the financial data is done mainly on
computers. Excellent computer skills as well as knowledge in the specific
accounting software used are critical if you want to become a forensic
accountant.

Collection of pieces of evidence is very important and also its documentation.
Courtroom proceedings use the documented papers. Aside from that, forensic
accountants also prepare the needed reports for the effective management of the
concerned company or enterprise and reports for the litigation parties or
agencies. In court proceedings, forensic accountants testify to provide
depositions based on their findings.

Various agencies and companies hire the services of forensic accountants. Most
of them are included in the agency staffs of law enforcements and criminal
investigations. Criminals are prosecuted based on the money trail tracked by
the accountants. CPA firms also have available forensic accountants in their
staff to assist partnership and shareholder disputes, employee theft or fraud,
business loss, and issues of professional negligence. Insurance companies also
hire the services of forensic accountants to investigate some insurance claims.

Top accounting firms in the US have forensic accountants. In fact, if you're
looking for a high-paying career in the future, why not choose to be a forensic
accountant? You see, according to statistics, forensic accounting will be
included in the top twenty job markets in the years to come.

So, how can be a forensic accountant? Well, firstly you need to finish a degree
in accounting and you have to pass the CPA examination. Aside from that, you
should also get extra coursework in criminal justice and law enforcement.
Undergoing a legal training is an additional point. You can also pursue CFE or
certified fraud examiner accreditation since this is quite similar to CPA
designation.

Upon entry in the field, you can receive around $30,000 or as high as $60,000.
Experienced and senior forensic accountants can earn over $100,000 a year. So
you see, being a forensic accountant means big money. But it entails a lot of
coursework and accreditations. Still, the benefits are awesome.

You can go for a forensic accounting career if you're interested in an
interesting yet lucrative job. Upward mobility is very much possible and that
means higher salary as well. This career is a great potential especially in the
coming years.

While you're still young or you're about to pursue a college degree, why not
take up accountancy? Who knows, you might become one of the best forensic
accountants in the country. This is an opportunity that is difficult to turn
down especially if you want to earn big money.

Free Accounting Software

Is there such a thing as 'totally free' nowadays? Life is getting harder and
harder every year. A great number of people are starving in different areas of
the world. It's quite unbelievable that you can still find 'free' things today
but if you try to surf the internet, you will notice a lot of ads that say
'free' this and 'free' that.

Accounting is an essential part of the lives of people as well as businesses.
Through accounting, an individual or business can keep track of all its
financial transactions. If you're a professional, it only means that you
earning income. Your income will be used to finance all your expenditures like
food, water, electricity, and many others. If you keep track of these things,
it can already be called accounting.

In businesses, financial transactions can get complicated and it will be
impossible for one individual to handle the task. This is where the accounting
software comes in. did you know that there are free accounting software online?
That's true and if ou only take time in surfing the internet, you can find this
free software.

Don't expect too much from a free accounting software. Since it is free, it
can't offer the same features and functions as that of a highend accounting
software. This free software is simple and easy. It can only handle the
accounting needs of homeowners and small businesses. The software focuses
mainly on simple accounting management. By taking advantage of the free
software, you can already perform the basic accounting tasks that paid
software's do.

The question now is whether you should get free accounting software or not.
It's only a download away but before anything else, there are some things that
you need to look for in accounting software; consider the following tips.

Large companies who want to promote products and marketing campaigns are now
providing the public with free accounting software. You have to surf the
internet diligently so that you can immediately take advantage of it.

You can find a lot of free things online but you should be warned about scams.
There are dishonest websites that tell surfers they offer free accounting
software that are downloadable. The site will ask you to provide personal
information on their registration forms and then ask for the number of your
credit card. Legitimate websites that offer free accounting software will not
request for any personal information.

While you're surfing the internet, why don't you search for trial versions? By
taking advantage of trial versions, you can evaluate if the certain software
meets all your accounting needs. After the trial version, you can now decide
whether you will subscribe the software or not. Trying out trial versions does
not involve any commitment. If you don't like the software, discard it and then
look for another trial version.

If you follow the tips mentioned above, you can now have a free accounting
software that you can use personally and even for your small business. Some
manufacturers offer different functionalities that are added to your existing
downloadable accounting software.

By taking time to surf the internet, you can find intuitive, robust, and
practical accounting software. Most free software can be downloaded without any
complications. If you want to practical, take advantage of this free software.
Try them now and handle all your finances efficiently.

How CPAs Can Help You

CPAs, or Certified Public Accountants, can help you in your individual or
business accounting and tax preparation in many ways. With the laws surrounding
accountancy such as generally accepted accounting practices for businesses, and
tax laws that change every year for individuals, hiring a CPA to perform your
accounting services needs is the best way to ensure that your accounting is
error free in case of IRS or other audit.

CPAs are Certified Public Accountants, certified by the Board of Accountancy.
These CPAs can perform a variety of services to small businesses, large
corporations, or individuals. They are accountable to government agencies for
their ethics and business practices, which ensures that you the consumer are
protected from fraudulent activity by CPAs, and giving you security in knowing
that your accounting is in good hands.

CPAs can perform general accounting, audits, or tax services. CPAs must have a
college education in accounting, and an examination prepared by the American
Institute of Certified Public Accountants (AICPA). A CPA can be self-employed
individuals acting on their own behalf and that of the CPA's clients, or they
can be employed within a public accounting firm in tax or audit services.

Having a CPA prepare your business or individual income tax return is a great
way to avoid errors, not to mention the prying eyes of the IRS and an audit. A
CPA must undergo continuing education as accounting and tax laws change from
year to year. Therefore, only a CPA can ensure that your tax return is
completely accurate. Not only is accuracy important to the IRS and in case of
an audit, but it is important to your immediate financial future as well.
Because a CPA has intimate knowledge of tax laws and available exemptions, a
CPA can make sure you get the largest refund possible.

In the case that you are chosen for audit by the IRS, your best bet to come
through the audit cleanly is to have a CPA by your side. A CPA is as familiar
with tax law as the IRS representative performing the audit. Because of this,
the CPA can negotiate a lower penalty, help you avoid penalties, and help you
claim the deductions you deserve. You should contact a CPA as soon as you have
received an audit notice from the IRS, because the CPA can help you prepare for
your audit and gather the necessary information. Then, the CPA can walk into the
audit interview by your side, completely in charge and confident of the outcome
of your audit.

If you own a small business, a CPA can also help you determine what business
taxes are required by your local, state, and federal government. In addition,
the CPA can help you set up a double entry accounting system that includes a
journal and ledger. The CPA can also help you to set up a standard chart of
accounts for use with your ledger. All of these tools will help you stay
organized and ready for tax time and any possible audits. The CPA can also use
the information from these tools to create financial statements for your
business, which will then help you to make business decisions, make comparisons
with competitors, discover industry and company financial trends, and prepare
financial reports and business plans for purposes of investors and bank loans.

Whatever the financial service required, a CPA is your best bet. With a CPA,
you have the security of a licensed, monitored professional along with the
peace of mind that all of your accounting is accurate and ready for any
possible audit.

How to Become a CPA

Becoming a CPA, or Certified Public Accountant, is not a simple feat. There is
a lot of education and training, as well as testing that an accountant must
undergo in order to become a CPA. Logically, the first step in becoming a CPA
is to have a desire to go into accounting. The next step is to ensure that you
have the aptitude to be a CPA; that is, you must have an aptitude for math and
numbers, as well as organization. A CPA candidate should also have a good sense
of moral values and business ethics.

Once you have determined that you are a good candidate for an accounting
career, you need to determine if becoming a CPA is the right accounting career
for you. To do this, you must understand what a CPA does. A CPA can be employed
individually or within a public accounting firm in tax or audit services. A CPA
is, of course, a public accountant. That means that the CPA provides services
on a fee basis, basically meaning that the CPA works for the public in general
rather than a specific corporation or company. This can translate into variety
in your CPA career.

CPAs make an average of $36,625 per year as a starting salary within local
firms. Within national firms, a CPA can have a starting salary of around
$44,375 per year. These figures may not seem fantastic, but for starting
salaries they are very competitive. A CPA can easily start out making enough
money to be considered middle-class income level, which is not a bad place to
start in today's society.

Once you have decided that you want to become a CPA, you must attend a college
or university to obtain a Bachelor's Degree in Accounting. All states within
the United States of America have a Board of Accountancy or similar department
or agency that lays down the requirements for an accountant to become a
certified CPA. These requirements will tell you how many credit hours of your
education must be in accounting related courses in order to become a CPA.

Once you have completed your degree, the Board of Accountancy will want you to
undergo testing to see if you can become a certified CPA. This testing may
include ethics examinations as well as examinations to test your knowledge of
generally accepted accounting principles, accounting laws, and accounting
regulations for your state, as well as tax law and principles.

Once you have passed all CPA examinations, some Boards of Accountancy may
require you to provide them with references. These references should be people
that can attest to your work ethic and moral character. These aspects of a CPA
are very important, because CPAs have a lot of opportunity to commit fraud and
embezzlement crimes. Therefore, only CPAs who have demonstrated good moral
character and a sense of ethics is allowed to receive a CPA license.

Once all requirements are met, your state will issue you a license to practice
as a CPA. You can then take this license to any firm and apply for a position
as a CPA. If you prefer, you could start your own small firm and practice as a
CPA alone. For more information about becoming a CPA, you should contact your
Board of Accountancy or local college or university today!

How To Choose Accountancy Software For Your Business

Accountancy software is a very important tool which helps a business
tremendously. With all of the accountancy software on the market, it is hard to
know what type of accountancy software you should buy. Choosing the right
accountancy software for your business, is just as important if not more
important then making other critical decisions for your business. The reason
why is because the accountancy software will be the database for storing all of
your businesses crucial business information which will impact future decisions
regarding your business, as well as keeping track of your financial status.
Here are some tip to help you choose the best accountancy software for your
business.

The first part of choosing accountancy software for your business, is to find
out what type of accountancy software will fit best to work with your
businesses industry. There are some accountancy software programs that are
customized to fit different businesses in specific industries. Regardless of
what type of accountancy software you come across, they all have multiple
strengths and weaknesses that will be useful or not as useful to certain
businesses. There is no such thing as a accountancy software package that will
fit multiple types of businesses in different industries the same.

Another factor in accountancy software that you must consider is the after
costs involved with the software. After costs include such things as multiple
licenses to run the software on more then one computer or within a businesses
network as well as the costs involved for training your employees to use that
specific type of software. You must always consider these costs when searching
for accountancy software.

You must know what type of accountancy software you can operate on your
computer systems. This also plays a large role in what type of software you can
obtain. If you decide to utilize accountancy software that you cannot operate on
your current computer systems, then you must factor in if it would be worth the
cost to upgrade your systems.

Due the constant development and upgrades of accountancy software, there will
always be a better version of accountancy software in the near future. However
since businesses do not want to have to upgrade every time a new version of
accountancy software comes out, you must determine if the accountancy software
will serve your business needs for about the next four years or so. You want to
buy accountancy software that can last you some time while still fulfilling your
businesses needs. This will prevent overspending for upgrades to new accountancy
software and computer systems.

There are many types of accountancy software that are accredited by accounting
agencies and organizations. These are the types of accountancy software that
you want to invest in for your business, because you know you will be using a
professional standard version of accountancy software.

There are many things to consider when reviewing accountancy software. By
following these simple suggestions, you will find professional accountancy
software that will fulfill your business needs for at least several years,
while maintaining a low overhead for the investment itself.

How To Draft An Agreement With Your CPA

Utilizing the services of a Certified Personal Accountant, more commonly
referred to as a CPA is very common. There are some things you need to think
about when drafting an agreement between you and your CPA. Here are the steps
involved in drafting up a legal and proper agreement between you and your CPA
that will help you maintain a strong and long lasting relationship between you
and your CPA.

Many CPA's require that you have an engagement letter in place. An engagement
letter is simply what you and your CPA expect form each other so that there is
no confusion as to what services are expected form the CPA and what is expected
form you the client. Here are some tips to writing a proper engagement letter.

In your engagement letter to your CPA, always define your expectation form the
CPA and the CPA's firm. This will provide an overall statement form you that
your CPA's firm can follow as guidelines that state specifically what you
expect and want.

Defining what you and your CPA's responsibilities are and what duties you must
both perform to make the relationship work, is very important to define in your
engagement letter. This will provide a definition of what you both need to do to
fulfill your obligations to each other which will help avoid future problems.

Defining the fees that you will incur for the services rendered by your CPA is
a very important part of the engagement letter, when done right, will eliminate
future financial issues. This wil safeguard you against rate adjustments from
your CPA and will require that your CPA discuss rate issues with you if they
choose to increase any costs for any services rendered that are defined in the
engagement letter. You must also know that the fees will only cover services
specifically referenced to in the engagement letter. So if you choose to add
additional services, it is recommended to draft up a new engagement letter to
include these new services and fees.

Sometimes you CPA cannot define actual fees as it may be based upon certain
circumstances. For these types of circumstances, discuss in detail why the fees
cannot be calculated before hand. Make sure that if the fees cannot be
determined before the services are rendered, that you have in your agreement a
maximum that you will have to pay or to set a service budget. This will
prohibit any outstanding bills. You may also want to include a clause that
states that your CPA will also contact you when your budget has almost been
reached.

Many time CPA's can use technical language that can become confusing to you.
Ask your CPA to use terminology you can understand and to make the word as non
technical as possible. This will allow you to feel confident in signing the
agreement between you and your CPA. An engagement letter is not only terms you
and your CPA agree to abide by, but also is a professional agreement that
protects you the client as well as your CPA.

How To Find A Good Accountant

Finding a good accountant does not always end up being a simple task. There are
so many accountants that seem to appear every year, it is hard to know who to
choose to put in charge of your finances. Finding a accountant is a very
serious task that is never taken lightly, especially since it involves your
business. Here are two simple steps of how to choose a accountant that you can
trust with your businesses finances.

The first thing you do to find a good accountant, is to build a list of
referrals form credible sources. To find resources for these referrals may seem
like a daunting task at first, however, it is simpler to accomplish this goal
then what you think. You can go to such resources such as your local bank, any
type of financial planners that you may have, and you can even talk to your
current insurance agent about people they know about to be your accountant. If
you have any contacts or affiliations with other businesses, then you can ask
them for accountant referrals as well. These are all trusted resources that can
provide you with some good leads on who you can trust to be your accountant.
Finding accountant candidates through trusted resources such as your businesses
bank, is one of the best ways to find an accountant. Most professional referrals
like this mean that the accountant has a good reputation.

Once you have your accountant referrals, you then want to contact them and
exchange information. Feel free to tell the accountant about your business as
well as your accounting needs and expectations. While you give the accountant
your information, also ask for theirs. Some key things you want to find out is
if the accountant can handle a business in your industry and your size, as well
as finding out all of the services they offer. Do not be afraid to look at their
portfolio and get estimates for their services. Be sure you know what services
the fees cover. You never want to select an accountant whose fees are to high
for what you can afford. Make sure that you can maintain a good line of
communication and determine if they are helpful and informative. The accountant
who offers the most detail and takes the most time to not only tell you about
the services they can offer you, but also listens to your concerns, is usually
the type of accountant that you are looking for.

After gathering all of the information about the accountants, then make the
decision of who is the right accountant for you. Remember that you will be
having a long business relationship with your accountant, so you want to select
an accountant that you feel you can build a good rapport with as well as someone
who will have you and your businesses best interest in mind.

By following these simple steps, you can have confidence in finding an
accountant who will work hard to help you direct your company into a positive
direction for financial growth and expansion.

How to Prepare for a Tax Audit

There is no reason to be afraid of an audit if you have been ethical and
truthful in your accounting methods. However, it is best to be prepared for an
audit to make sure that it runs smoothly. Different types of audits require
different preparation methods.

If a business is brought up for an audit by the IRS, there are several things
you can do to prepare your business for audit. First, review the tax returns
that are being audited. Make sure that you are ready to explain how you or your
tax preparer came up with the figures in the return when you go into the audit.
If you don't know how your tax preparer came up with the figures, or you have
any questions, you should contact your tax preparer prior to the audit for any
clarification needed so that you are thoroughly prepared for the audit.

Organizing records used to prepare your tax returns yearly is a great way to
maintain proper accounting before an audit. However, if you have not organized
your records as you filed year by year, now is the time to organize them for
the audit. Make sure that the person performing the audit has access to all
records used to prepare the tax returns. For the audit to go smoothly, these
records should be organized in a logical fashion. In addition to making an
audit quick and painless, this organization will lend you credibility with the
auditor, thus making the auditor take things in stride if a small issue does
arise during the audit.

Your audit notice should tell you what documentation the auditor wants to see
during the audit. Typically, auditors may want to see bank statements, canceled
income checks, receipts for expenses, and your financial records. If you have a
smaller business, you are not required to maintain a formal set of financial
records such as journals and ledgers. However, the auditor may request to see
any financial records you do have, and see your bookkeeping system during the
audit. If your bookkeeping system in on a computer or otherwise electronic,
make sure you take a printout of your financial records with you. If you do
keep a ledger and journal for financial records, the auditor is entitled to see
them and you should bring them to the audit also. In addition, you should bring
with you any prepared financial statements so that the auditor has a clear
overview of your bookkeeping.

If you don't keep a formal set of financial records and you are missing a few
receipts, take your appointment books, service logs, and diaries with you to
the audit as well. The documentation in your appointment book, service log, and
diary will substantiate your expense for deduction without a receipt, provided
the expense can be proved to be reasonable based on the information in your
personal records.

If you have a home based business, you will also want to bring with you to your
audit any usage logs of "listed property." This is anything that you use for
business and home use. Usage logs show that you use these things for business
purposes, thereby allowing you to take a partial deduction for that property
during the audit if you have not already done so.

If you are in any doubt as to what information you need to prepare for your
business tax audit, you should contact a certified public accountant to assist
you and represent you to the audit representative.

How To Receive The Best Service From Your Accountant

Your accountant plays a very important role in your life. This is why it is
important to maintain a good business relationship with your accountant. Here
are some things you can do to maintain a proper business relationship with your
accountant and how to obtain the best service form your accountant.

Make sure that your accountant understands your needs from them. These needs
not only include services but also the amount of attention you need designated
and expect form the accountant themselves to ensure you receive the standard of
service that you require. By doing this you will know what type of fees you will
be receiving form your accountant, and your accountant will know if they can
fulfill the obligations that you expect form them.

Your accountant is there to help and assist you at all times. Many accountants
are there to help their clients and do not mind you sending a request for their
services. Never be afraid to consult your accountant on what you should do in
any financial circumstance as they are there to be your advisor for financial
matters. Maintaining a open line of communication with your accountant will not
only help you make the best decisions with your financial matters, but it will
also help you avoid financial problems in the future.

Patience with your accountant is a absolute must. An accountant usually has
multiple clients if not having a large database of clients. You must give your
accountant time to respond to your requests. An accountant can become suddenly
busy, so it is good to wait a reasonable time for your accountant to respond
back to you request. By continually harassing your accountant about issues
without giving them a reasonable amount of time to respond, will only decrease
the communication and value between you and your accountant.

Having a automatic system set up with your accountant will save you a great
deal of time. Setting up automatic updates for your accountant to send to you
will provide you with the necessary information to see how all aspects of your
financing are going while giving your accountant a deadline to have these
updates ready for you. This will eliminate stress or confusion regarding your
finances for both you and your accountant and will be a mutual convenience.

The best way to bring out the best services in your accountant, is to properly
pay them on time. By not paying your bill on time, you only guarantee that your
accountant will not give any attention or regard to your requests. By paying
your accountant immediately or before the bill is due, you can expect the most
attention and assistance form your accountant. By being loyal and fulfilling
your obligations to your accountant, you can expect your accountant to fulfill
their obligations you.

By following these tips, you will maintain a strong relationship with your
accountant as well as maintain a good line of communication with them. These
simple tips will also eliminate future problems that can arise with your
accountant.

How to Use Links Effectively

Accountancy website links are everywhere on the internet. They can be found
through web searches on sites like Yahoo and Google. They can also be found on
most accountancy websites. You can also find accountancy website links through
government agency websites or through colleges and universities. But how do you
find the information you need within these accountancy website links? How do you
stay organized and use the accountancy website links effectively?

The first thing to remember about using accountancy website links to find
specific information is that different accountancy websites have links to other
accountancy websites which have links to yet other accountancy websites. This
means that you can get lost in a sea of accountancy links quite easily, and
completely lose track of which accountancy website you started out with. There
are several ways to avoid this confusion.

One way to avoid confusion and keep from losing your original accountancy
website is to open all accountancy website links in a new window. You do this
by right clicking on the accountancy website links and then clicking on "open
in new window" in the shortcut menu that appears. This will open the
accountancy links website in a new window, allowing you to keep the original
window open while you view each accountancy website link. However, this method
can also be confusing. Let's say you start out with a well known accountancy
website. You click on an accountancy website link. This leads you to another
accountancy website link for which you open another window. This window gives
you yet another accountancy website link. Before you know it, you can have so
many windows open with so many accountancy website links that you lose track of
which links you have followed and which ones had the information you needed.

Another way to avoid confusion is to use the new tab feature of newer internet
browsers such as Microsoft Explorer. A new tab is somewhat like a new window,
except that the window is the same. Instead of a new open window in the task
bar, you will create a new tab within the same window. You do this by right
clicking on the accountancy website link, and selecting "open in new tab" from
the shortcut menu that appears. However, this method, too, can become
confusing, because once you have followed three or four accountancy website
links and have several tabs going in one window, the names of the tabs shorten
themselves to the point where they are no longer visible, and it is impossible
to determine which accountancy website you are looking at.

The best way to surf through accountancy website links is to use a combination
of new windows and new tabs when following the various accountancy website
links. You can keep organization very easily in this manner. Right click on the
accountancy website links in the original accountancy website and open them in a
new tab within the same window. As you surf through the accountancy website
opened in the new tab, you can close the tab when you are finished. If you come
across an accountancy website that has it's own accountancy website links page,
you can open that links page into a new window. Then, open the accountancy
website links from the new window into new tabs in the same page. This way you
can easily track which website you used to come to the accountancy website
links.

List of Accounting Careers

Every year, different colleges and universities from all over the world produce
graduates with different college degrees. It only means that every year, the
unemployment rate increases and very few newly-grads land a job. It is very
important to choose the college degree that you're going to take to ensure your
professional career in the future.

Among the top college courses of degree is accounting. Accounting involves
different tasks which include keeping track of income, assets, liabilities, and
a lot more. You can learn more about these tasks if you choose an accountancy
course.

In accounting, you will learn a lot of things like how businesses and companies
work. Successful businessmen are accountants one way or another. You see,
accounting is essential in businesses. It is a way of evaluating the business
situation, whether a company is losing or earning profits.

In short, the business' language is accounting. All business activities are
quantified through accounting and this is where all business reports are
derived and later on, communicated to the management level. What career
opportunities can you expect if you're a graduate of accountancy?

1. Public Practice -- if you become a CPA, you can do public practice. You can
give your services to clients in exchange for an affordable fee. Usually, CPAs
work in partnerships and they offer their services to businesses, governments,
and even to individuals. The job responsibilities of an accountant in public
practice will usually include auditing, taxation, management advisory services,
etc. You can gain a lot of work experience in this field.

2. Education -- accountancy graduates can also teach after they get their
methods of teaching. They can become a researcher, reviewer, and a professor.
If you choose this profession, you can learn a lot of things. You can clear out
certain accounting issues, conduct research, and then distribute the results.

3. Government service -- you can look for job opportunities in the state or
federal level. Government accountants are responsible for tracking costs,
budgets, and analyzing the various government programs that involves huge
amounts. Being a government accountant can give you the chance of improving the
conditions of the poor however, due to political influence, your will experience
bureaucratic impediment.

If you want to become a government accountant, you have to think twice because
the public usually think differently of those in position. But it doesn't
really matter what other people think as long as you're doing your work
honestly and effectively.

4. Commerce -- accounting groups are maintained by corporations, whether big or
small. The groups of accountants prepare and organize all the financial
statements, handle tax issues, track costs, handle international transactions,
and a lot more.

After years of being a member of the accounting group, you will have your
chance of becoming the department head or you can be promoted as the cost
accountant, budget officer, chief accountant, or even the company auditor. The
size of the corporation determines the various responsibilities of the
accountant.

Now you know that by taking up a course in accounting you will be offered a
myriad of opportunities in the future. You must be able to choose the right
career path. Before making a decision, you have to consider the
responsibilities and nature of work of a certain accounting career.

Choose the one that you like most and one that you're passionate about.

Starting a Business Accounting

Starting a business can be quite trying at times. There are many things you
must consider when starting a business. In addition to deciding what type of
business you will start up, what the business will sell or what services the
business will provide, you must also make sure that your business is in
compliance with all local, state, and federal business laws.

In addition to a business license, required by almost all localities in the
United States, a new business must file many tax forms at the start of the
business. If you are selling a product, your business will need to file for
retail sales tax licenses. Depending on the location of your business, you may
need to file for a retail sales tax license from your city, county, and/or
state. If you are selling a service, and your state or city requires sales tax
for services, your business will also need these forms.

Another thing your business will need to file for is a federal tax
identification number. This number is used on all tax documents for your
business. It may not be required if you will be the only person working for
your business. However, if you plan to use subcontractors or employees, you
will need a federal tax identification number in order to pay your contractors
or employees. This is required by the federal government so that wages paid can
be tracked by the IRS for purposes of collecting income taxes.

Some cities require that individuals and businesses pay a local income tax in
addition to state and federal income taxes. You should find out if your
business will need to pay this type of tax, and what the filing requirements
are for your location. Many businesses are required by law to file quarterly
federal income taxes. If you are a smaller or home based business, these
quarterly tax payments are not necessary by law, but can prevent you from owing
taxes at the end of the year. If you are not sure whether or not your business
should make quarterly tax payments, you should contact a professional
accountant to answer these and any other questions. If your business does need
to make quarterly tax payments, you will want to obtain the necessary forms for
your business taxes from the IRS prior to starting your business. Become
familiar with the forms and the processes, and organize yourself so that your
business runs smoothly after start up.

There are many other considerations when starting a business. You need to make
sure that your business follows all business laws applicable to your type of
business. Some industries and businesses require additional licensing. Other
industries require additional insurance to be purchased. Workman's Compensation
insurance is required by federal and most state laws if you have any employees.
Some states require a business to carry liability insurance to cut down on law
suits, while in other states this type of business insurance is optional.

Make sure you know the legal requirements for starting a business before you
actual begin doing business. This way, you will be compliant with all local,
state, and federal business laws, thereby cutting down on your risk of running
a business as well as cutting out the possibility that your business could be
shut down before it has ever truly begun.

Successful Career in Accounting Even if You're Hit Forty!

You're never too old to dream, right? If it is your ambition to become a
well-known and most sought-after accountant in the business industry, you can
turn that dream into reality even if you're 40 years + already.

If you started planning your career path when you were still younger, your
dream is within your arm's reach. In order to experience continuing success,
you must have excellent knowledge in accountancy. You must work accurately and
you should gather work experience through the years in the profession. Check
these steps so that you can at least evaluate your situation right now:

1. You must excel in Mathematics -- you must know how to manipulate numbers.
Did you excel the subject when you were still in high school or college? As an
accountant, you should love mathematics. If you hate it, then you're not an
efficient accountant and you're bound to commit mistakes especially in the
computation and analysis of financial data.

2. Suppose you're not a graduate of accountancy and you're already too old to
attend classes in traditional classroom-based colleges. Don't you worry because
there are now online colleges that let's you earn a degree in accounting from
your very own home. You simply need an internet connection at home and then you
have to comply with the requirements of the online college and that's it.

3. Are you already a CPA? If you're not, then you can also get a certification
online. Comply with all the requirements and pass the exams and you can become
a CPA.

4. State requirements vary when it comes to accounting degrees. You have to
ensure that the accounting degree you've taken fulfills all the requirements of
the sate you live in or in the state that you plan to have your accounting
career.

5. There are different accounting fields. Are you already in the right career
path? If not, perhaps it's now time to change your accounting career. So which
is it going to be? Government accounting, public accounting, internal auditing,
management accounting, etc? Choose the one you really like.

6. Older adults are sometimes hard to teach but if you want to reach your
ultimate goals, you must not stop learning. You have to become proficient in
the accounting software used by the company that you're working. There is a
great number of accounting software out there and you must familiarize yourself
with the software.

7. How long have you been in the accounting field? Have you been promoted? You
have to take advanced accounting career studies so that you can become highly
skilled and experienced in the profession. You will benefit a lot and
promotions will come soon.

Have you looked at the steps carefully? By now, you can already tell if you
still have a chance to reach your goals or not. Age should not hinder your
ambitions. Besides, by now you're probably a senior accountant in the company
and you're earning big money. Still, if you're not contented with your current
position, you can always take advanced career trainings to improve and develop
up-to-date accounting skills.

Don't be left behind and don't stop learning. Bear in mind that every year, new
accounting graduates are produced and you have to stay as competitive as ever to
maintain your seniority in the office. The Benefits of an Accountancy Career

There is an increase in demand for knowledgeable CPAs all over the world. When
you say knowledgeable, the accountant must know how to perform various duties
like bookkeeping, tax preparation, company audits, and even project management.
The demand for the best CPAs in different industries is due to the updated laws,
business practices, and the reliance to technology.

Here's great news to those accountancy graduates who love to work with numbers
and who are willing to learn the newest accounting software -there are a lot of
job opportunities out there, waiting for qualified accountants. According to
statistics, the accountancy field is growing at a very fast rate. Presently,
there areabout 1.2M accountants in different industries including corporations,
public agencies, charitable organizations, and educational institutions; this is
the best time to join the accounting field.

If you've earned a Master's degree in accounting, the better because you have a
higher chance of landing a job; those who have a bachelor's degree can also take
advantage of the various job opportunities online or in the local papers.

The licensing requirements for accountants vary from state to state. This is a
very important consideration when choosing a degree program in accounting.
Before you can take the exams to become a CPA, you will need a 150 hours
course. By 2009, almost all the states in the US will follow the same
requirements.

About the salary of accountants, the lowest rate is roughly $35,000 per year
and that is for starters only. Once you're hired and you've been with a company
for many years, the salary will naturally increase. Did you know that the senior
accountants can earn as much as $80,000 per year on the average? That's a lot of
money, right? Being an accountant has its benefits, especially in term of
salaries.

It seems that accountancy graduates of today are given more job opportunities.
You should be thankful because unemployment is prevalent in many areas. If
you're a graduate of accountancy, it means that you have better chances of
finding a good paying job as compared to graduates of other courses. If you try
to analyze the business situation, accountancy is essential to the success of a
business organization or company. With the growing number of business
worldwide, big scale or small scale, accountants are badly needed.

For those who are just going to start college, why don't you consider an
accountancy course? According to statistics, the demand for knowledgeable
accountants will increase in the years to come, so why not join the force? It
will only take a couple of years to graduate. Make sure that you have excellent
grades so that you will have an edge when you apply for a job. It pays to study
hard now because you can use the knowledge in the future. You can be one of the
assets of the biggest company in the world -- now who wouldn't want that?

The benefits of an accountancy career are nothing compared to other degrees in
college. Although some accountants have bad reputations, most of them are still
working honestly. These accountants are contributing their knowledge and skills
for the betterment of the business industry.

If you want to be part of them, go ahead; just try and apply for a career in
accountancy. Who knows, tomorrow you might already have a job.

The Role And Benefits Of Accountancy

When you hear the word accountancy, it makes you wonder what accountancy really
means. Many people come to a quick conclusion that accountancy is just a word or
term to go with accounting. Many people do not realize however, that accountancy
is the life of any thriving business and is a necessity within any
establishment. Once you understand what accountancy is, then you will realize
how important of a role it plays in how we run and operate our business
finances. We will go over some of the basic aspects of accountancy.

The core of accountancy is maintaining extremely accurate records of any and
all aspects of a business and how it earns and spends money. You must maintain
multiple types of records to account for every aspect of your business, which
is why accountancy can become a very complicated process but is necessary.
Different parts of these separate records are your accounts receivable and
payable, your current inventory, all of your sales orders for your current tax
period as well as an accurate database of your past sales records and your
purchase orders. You must also maintain a accurate account of your bank
statements and a backup record to cross reference all of your records to make
sure they are accurate and up to date. This is only one part of accountancy.

There is another aspect of accountancy which involves knowing what to list each
transaction as. Now in accountancy you need to be able to define what are your
assets, knowing how to identify your liabilities, being able to show your
expenses as well as you positive income. In order to do this properly, you must
know how to define these different terms and what they do and do not apply to.
This can make what some would view a simple task of maintaining proper records
even more complicated.

These two parts of accountancy are extremely important, not only for tax
purposes, but also for banking reasons as well as audits that can arise form
businesses that you interact with. Accountancy also provides several benefits
to businesses that use accountancy properly.

The biggest and most obvious benefit of accountancy is being able to pay your
taxes accurately and on time. However, this is a small benefit compared to
other vital benefits that accountancy brings. Accountancy can help you keep a
accurate spending balance for your bank accounts, as well as give detailed
reports of of all of your expenses and cash flow which is necessary for audits.
One benefit that you can gain from accountancy, is maintaining accurate expenses
and being able to reflect that in your products prices. If you do not accurately
maintain records of your costs, then you could accidentally under price your
products and actually lose money. Accountancy will give you a detailed
projection of your costs and accurately show you your profit margin that you
can compare with your labor and other expenses.

Many businesses suffer financially because they do not keep accurate records
for every aspect of their business, which is why accountancy plays a very
strong and important role in a business. Without accountancy, a business would
suffer and eventually fail as it would have no records or projections to help
it progress. The Role And Operations Of Government Accountants

When people think of accountants, government accountants are not the first type
of accountants that come to mind. However, government accountants play an
important role in the accounting industry. Government accountants have many
duties and functions that serve different purposes. These different functions
of government accountants not only help the government, but also protect the
public at the same time. Government accountants work hard to make sure that
businesses operate honestly and ethically. Government accountants also make
sure that the citizens within that government are fulfilling their tax
obligations. Here is an overview regarding how government accountants operate.

With businesses, government accountants make sure that a businesses stays
completely honest to its investors and to the public. Government accountants do
this in more then one way. The first way government accountants oversee
businesses, is to cross reference their records to make sure that all of the
businesses accountants have reported the businesses finances accurately. This
is important, especially for publicly traded companies, because these records
can be viewed by the public or by private investors. If the information is not
recorded accurately, or if a government accountant sees something that is not
right with the business records, then government accountants can report it and
take action. Government accountants also make sure that businesses pay their
taxes on time and do not cheat the government with tax evasion. This role of
the government accountants keeps businesses honest with their records and also
ensures that the businesses are paying their taxes to the federal government as
they should be.

Government accountants also play important roles with the public. This role not
only includes that the citizens of that government pays their taxes on time, but
also prohibits illegal methods for obtaining money. This is a very important
aspect of government accountants, because like a business, they have the
ability to check your financial records to make sure that you are also
fulfilling your obligation to paying your taxes as well as making your money
legally. This helps the government fight against illegal income methods and
encourages its citizens to provide a income from a acceptable way in that
society. Because of government accountants constantly monitoring the public,
government accountants can identify suspicious activities form individuals and
report it. This helps fight against criminal activities. This service from
government accountants also helps the government obtain as much money as
possible from its citizens with such things as taxes, which helps the
government function.

Government accountants play a very important role with businesses, the
government and the public alike. Without government accountants in place, there
would be no financial monitors for the government, resulting in governments
facing many problems. Government accountants also play a vital role to ensure
the protection of the the governments and publics best interest. There is no
dispute that without government accountants, there would only be disastrous
results. Government accountants help ensure the financial balance and honest
financial reporting within a government. This is why a governments accountants
role is so important and why it holds a great deal of value to the government.

Types of Accountancy Career

Now that you've taken up a course in accountancy, you probably know that there
are various types of careers in accountancy waiting for you after you've
graduated. If you pass the CPA examination, you will have higher chances in
securing a position as a professional accountant.

Accounting in itself is considered an art. In involves analysis and
interpretation of financial data. Do you believe that individuals and
businesses need accounting one way or another? Aside from business
establishments, individuals also make use of accounting in their everyday life.
For instance, when you compute or evaluate your expenses, income, and other
financial information, that is already considered accounting. Accounting is
very important and because of that, it is considered an indispensible business
tool. Big and small businesses, as well as individuals, need accounting.

Accounting is of several types and therefore, when you decide to look for an
accountancy career in the future, you will notice that there also several types
of accountancy careers available.

To start with, you can become an industrial or private accountant. Here,
accounting is limited to only one firm. If you choose this profession, you will
only be serving one employer. You have to provide your best service and skills
to your employer and in turn, the employer will remunerate you.

The second accountancy career that you may be able to land is serving as a
public accountant. If you're already a CPA, you can serve the general public.
You will be called a public accountant once there is already the so-called
practitioner-client connection or relationship. Even those accountants who are
not yet certified can already practice their profession. Oftentimes, CPAs join
partnerships and they have a wide scope of clientele from the local area to the
national and even international clients at times.

Being a government accountant is another career. In this profession, you will
be working for the government, whether local, state, or federal. The accounting
methods used conventionally are also used in government accounting. You will
make use of the method called doubleentry systems and you will be using
journals as well as ledgers. If you're a government accountant, you will be
focusing more in rendering service. Government units are not very particular
with profits because they are put up to serve the public.

Fiduciary accounting is another type of accountancy careers. Here, accounting
relies on trust. Executors, administrators, trustees, or any other person who
is trustworthy can do fiduciary accounting. A fiduciary accountant keeps
important records and he also prepares certain reports. The courts can
authorize these fiduciary accountants to carry out their tasks.

The last is being a national income accountant. This type of career makes use
of the social and economic concepts and not the concept of business entity. As
a national income accountant, it is your task to provide a public estimate of
the yearly purchasing power of a nation.

Now you know the different types of career in accountancy. To sum it all up,
the five types are as follows: industrial or public accounting, public
accounting, government accounting, fiduciary, and national income accounting.
So, which of these five careers will you specialize in? You have to choose
wisely because your future career will depend on it. While you're still
studying, you can already determine which career path to take.

Plan ahead because by doing so, you can reach all your goals in life.

When to Use a Certified Public Accountant

A Certified Public Accountant, or CPA, can help you make sure that your small
business accounting or individual taxes are accurate and complete. Some
businesses are small enough, such as home based businesses, that a Certified
Public Accountant is not needed for most accounting tasks. However, there are
times when a business or individual should use a Certified Public Accountant.

If you have a small business, and you have discovered that an error in your
bookkeeping exists, it can often be difficult to locate where and when the
error was made to correct the mistake. A Certified Public Accountant has
special training and education to find these errors through an external audit
process. It is vital that these errors be corrected, because the books you use
in your business are used to determine taxes and business decisions.

These records also allow investors to see how well your business is doing so
that you can get more backing to help your business grow. A Certified Public
Accountant can find and correct any errors in your bookkeeping, and help you
organize your bookkeeping so that you or the Certified Public Accountant can
easily generate financial statements and reports. These financial statements
and reports prepared by a Certified Public Accountant are the documents that
most banks and investors want to see before making any financing decisions.

If you are starting up a home based or small business, you should seek the
guidance of a Certified Public Accountant. The Certified Public Accountant can
help you set up a double entry method of accounting with a journal and ledger,
as well as a chart of accounts to help you use these tools effectively in your
business. The Certified Public Accountant can also advise you as to what taxes
you will be responsible for paying throughout the year. Quarterly taxes are
often required of businesses and self-employed individuals. To avoid penalties,
late fees, and a large tax bill at the end of the year, you should contact a
Certified Public Accountant for this information.

Any individual that is self-employed should seek out the services of a
Certified Public Accountant when it is time for tax return preparation. Tax
laws change every year, and a Certified Public Accountant can help you make
sure that you are receiving all of the deductions you have available as a
self-employed individual.

Any individual with children, who is separated or newly divorced, or who may
wish to itemize deductions based on mortgages, medical expenses, and charitable
contributions should also seek out a Certified Public Accountant for assistance
in income tax preparation. This is because the tax laws are very complex, and
change often. If you make a mistake and claim a deduction that you could not
legally claim, the IRS may audit your return and cause you to pay back the
refund amount, with penalties. Additionally, if you make a mistake and do not
claim a deduction that you could legally claim, the IRS will not attempt to
correct the mistake, causing you to receive a smaller refund. Either way, you
lose money. The best way to avoid these and other errors is to have a Certified
Public Accountant prepare your income tax return.

Where to Find Certified Public Accountants

So, you have decided you need the assistance of Certified Public Accountants.
How do you find Certified Public Accountants? You can go through the yellow
pages, of course, and look under the heading Certified Public Accountants.
Alternatively, you can do an internet search for Certified Public Accountants.
These methods, however simple they may sound, might not be effective in finding
qualified Certified Public Accountants.

Looking through your local yellow pages for Certified Public Accountants will
give you hundreds of firms and individuals that are Certified Public
Accountants in your area to choose from. How do you choose one of the Certified
Public Accountants with no information other than the address and phone number?

Doing an internet search for Certified Public Accountants will give you
thousands of results, many of which will not be local to your area, and many of
which will be information about Certified Public Accountants rather than
listings for the Certified Public Accountants themselves.

You can use a localized search engine such as Yahoo Local or Google Local to
find Certified Public Accountants in your area. However, this too has its
drawbacks. If you use Yahoo Local, you will only receive results that are like
yellow page results: an address and phone number. There may or may not be
reviews by consumers of the Certified Public Accountants as well, however,
which could also help you to make a decision. Google Local, however, also
provides you with website links for the Certified Public Accountants when they
are available. This allows you to go to the websites of the Certified Public
Accountants and gather information about the firm or individual to help you
make a decision.

Once you have narrowed down your search for Certified Public Accountants to a
smaller number of possibilities, you should go to your local Better Business
Bureau website or call the Better Business Bureau directly to discover what the
rating is for the Certified Public Accountants you found in your search. These
ratings will tell you if the Certified Public Accountants have ever had
complaints filed against them with the Better Business Bureau.

Another source for testing the credibility and ethics of the Certified Public
Accountants is to contact your local Board of Accountancy or similar agency.
These agencies are charged with monitoring Certified Public Accountants. They
also take complaints and follow up with disciplinary measures against Certified
Public Accountants. The Board of Accountancy may also perform periodic audits of
the work performed by Certified Public Accountants. This monitoring puts these
agencies in the best position to help you make an informed decision when
choosing Certified Public Accountants.

When in doubt, never work with Certified Public Accountants that have had
complaints against them. Do not work with Certified Public Accountants that do
not have proper licensing to practice in your locality. You should also avoid
Certified Public Accountants that will not meet with you in person, sign
contracts, or provide proof of education, licensing, and certification. If you
still have trouble finding Certified Public Accountants, select of well known
firm of Certified Public Accountants to handle your affairs. While the fees
associated with these Certified Public Accountants may be higher than smaller
firms, you will have the peace of mind that you are in good hands of ethical,
qualified Certified Public Accountants.

Why Choose A Career In Accounting?

Accounting is a great career that offers many benefits. In fact, accounting is
in high demand just like other professional careers in other industries such as
health care and electronics. Accounting offers many job options and some great
opportunities to work, such as major corporations and the government. We will
go over some of the major key benefits and show you why so many people are
choosing a career in accounting.

One of the biggest key benefits that you can obtain form accounting is the
experience you can gain from working in the accounting field. With accounting,
you learn how businesses work and operate in a ever evolving field. This is
very important experience that you can gain, that will not only help you in the
field of accounting, but this experience will also help you know how to organize
and run your own business. It is a fact that many successful business people in
the world today, were at one time involved in the field of accounting. The
knowledge they gained form accounting helped them build their own professional
establishment. Even if you eventually leave a career in accounting to pursue a
career somewhere else, your experiences from accounting will still become
useful and beneficial.

The skills required in accounting are not high except in two areas being,
analytical and computer skills. When compared to many of the different
professional careers out there, almost any skill requires you to have some type
of attention to detail as well as computer technology skills. However,
accounting differs from the rest in other areas. In accounting you do not have
to socialize with many people, you work in a self pressure environment only,
and you do not need a high amount of initiative. This separates accounting from
many other different professions, making accounting a much easier career to
develop the necessary skills to become an accountant. The best feature of a
career in accounting, is that anyone can learn to become an accountant. There
are no specific skills or talents that cannot be learned and developed in the
field of accounting.

The other major benefit of a career in accounting is the great pay. In fact, in
your first year of accounting you can make as much as fiftyfive thousand dollars
a year. Within ten years or less of your career in accounting, you should be
making over six figures. This can be obtained quicker by furthering your degree
in accounting which you can reach as high as an MBA. There are many careers that
take much longer to receive accreditation for that do not allow you to earn that
type of income so quickly. Along with all the other benefits of accounting, it
is no surprise that accounting is a very popular field that many people are
working to get into.

You can see for yourself that accounting has many professional and career
benefits that are appealing to anyone. From being able to work in a
professional setting either for a large corporation, the government or
yourself, accounting offers some key features and benefits that cnanot be found
in other professional careers.

Why Regulate Accounting?

Many people wonder why the idea to regulate accounting is becoming so popular.
Due to past experiences with manipulating accounting figures, it is no wonder
that accounting has been under so much scrutiny. This is the reason why so many
people feel it is time to regulate accounting, due to so many companies not
abiding by the rules set forth. Because of the many negative incidents that
have occurred with different scandals and schemes, there has been a lot of
mistrust form the public in the accounting field. To regulate accounting, will
give confidence back to the public. Here are some of the benefits that will
arise when we set higher standards to regulate accounting.

A majority of the public feel that accountants are working in the interest of
their own company and the companies that they work for, instead of working to
inform the public properly. When you regulate accounting, this prohibits any
company and accounting firm to hide the truths about the company and its
financial status form the public. The regulation of accounting, will force
companies and their accountants to be more open and straightforward about their
financial dealings and show their true financial situation.

When you regulate accounting, it will play an important role in the stock
market as well. There are many mixed feelings about investing in publicly
traded companies, because of the capabilities to hide a companies financial
distress. If you regulate the accounting laws, then it will lower the chances
of a company being able to manipulate any financial reports shown to the
public, which is a dilemma that has happened in the past.

When you regulate the accounting laws, you will hold corporations and public
organizations responsible or their actions. This is a very important part in
regulating accounting practices. With tougher laws in place to prevent fraud
and to prevent special favors, the public will be safer against fraud. To
regulate the laws, will let not accounting firms and businesses alike, aware
that they will be held accountable for their actions. Not only will this give
confidence back into the accounting field, but it will also deter fraudulent
activities in the accounting industry due to the strict consequences.

The most important reason to regulate accounting laws, is to protect the
public. Whether it is a publicly traded company, or a company that gains a
majority of investments form its workers, both alike need to be protected form
fraudulent activities. This is very important and is why the government has
leaned to regulate accounting and its laws and practices. It has been proven by
past experience, to not have strong accounting guidelines in place and enforced,
only leaves room to lead to a disastrous result.

There are many mixed feelings regarding the ideas to regulate accounting.
However, despite the mixed opinions, the idea to regulate accounting is strong.
It is not only the responsible thing to do, but it will also safeguard the
public form companies and fraudulent activities that could occur. To not
regulate accounting laws and practices will only leave room to gather more
mistrust in the accounting.

Why Use Outsourced Accounting?

There are many reasons why accounting is being outsourced more commonly by
different types of businesses and organizations. Some may think that using
outsourced accounting services is a bad idea because of less control and more
costs, but that is a myth that has been proven wrong countlessly. In reality,
there are greater benefits by outsourcing your accounting services, then by
organizing your own accounting department or doing your accounting by yourself.
We will go over the benefits of outsourced accounting and allow you to see why
it is a popular action that many businesses and organizations are taking.

Using outsourced accounting services can actually save you money. By
outsourcing your accounting needs you do not need to hire employees an in house
accounting department. This saves you not only money but also time. It costs
time and money to find certified employees to operate your accounting
department. With outsourced accounting service,s you do not need to worry about
salaries, workers compensation, insurance, or many of the other expenses of
having employees. Another great benefit, is that you do not have to worry about
losing an employee and having to find another in house accountant to replace the
one you lost. There are also many accounting firms that can integrate their
services with your own accounting software so that it provides an easy
accounting integration.

Another great benefit that also comes from outsourcing your accounting needs,
is that you can focus more on the accounting data. This eliminates having to
focus on entering your accounting information and allows you to look at your
current situation and make plans for future improvements and developments with
the data provided. By being able to maintain your focus solely on payments,
invoices and profit and losses, you will be able to spend your time on finding
better solutions and maintaining a better relationship with your suppliers and
customers.

By using outsourced accounting services, you have a lower risk of error and
problems with your accounting. It is better to trust your accounting needs with
a certified professional rather then trying to do your accounting yourself.
Unless you are a certified accountant, you have a very good chance of making a
error with your accounting. This chance of error is nearly eliminated when you
use an outsourced accounting firm that specializes in the field of accounting.
These errors can have a very negative and dramatic effect not only on your
records of what is owed and needs to be paid, but also on your current costs
and projections related to your profits and losses. By not properly and
accurately maintaining accounting records, you run a high risk of failure with
your business.

Outsourcing your accounting needs has proven to provide many benefits. These
benefits will not only save you time and money, but will also provide solutions
to help you grow and expand your business based on the information you receive
form your accountant. Accounting can be a very strenuous task that requires a
lot of attention to detail as well as knowledge about the field to have it done
correctly. Because accounting can be outsourced so easily and can be done at a
lower rate outsourced then in house, outsourced accounting has proven over time
to be the best option.

Services in Financial Accounting

Offices and companies have various activities everyday and that includes
accounting. Whether the company is private or government-owned, it still makes
use of accounting. Companies, offices, and various organizations or
institutions cannot operate successfully without an accounting staff. However,
having an accounting staff can get very expensive and so most companies resort
to auditing services or financial accounting services. Chartered accountants
are not hard to find; with the use of the internet, you can easily locate them
and hire their services.

A company needs to seek help from a competent and experienced auditor or
accountant so that all financial activities of the company are monitored and
evaluated. This way, the company can gain a lot of benefits which can lead to
its success. It is now easy to monitor the sales as well the operating
expenses. All expenditures and income are recorded and the accountant can even
provide you with strategies to help increase the profit and sales of a company.

Outsourcing is quite popular nowadays because it is a cost-effective measure
for companies who want to cut-down their operation costs. That is why most
companies are looking for services of chartered accountants. These accounting
services can provide any company or organization with auditing services,
company laws, taxation, and other related matters.

Most of the auditing services are secured, private, and cheap. New companies
are opting for these financial accounting services. These accounting services
are cheap and you get a lot of benefits. It would be best to choose a financial
accounting service locally because some laws differ in other countries. So while
you're conducting a search online, you have to check the location of the
accounting service and if ever you choose a foreign accounting service, you
have to provide all the necessary information so that nothing goes wrong.

The various services offered by these chartered accountants are quite helpful
especially in taxation, financial accounting, preparation of account
statements, and a lot more. You don't have to worry about privacy issues
because all business dealings are confidential and safe. These chartered
accountants can be trusted.

However, it is a good idea to check out the background of these financial
accounting services, just to be sure. You can check out the customer
testimonials to see if the previous clients are satisfied with their services.
it is one way of telling if the financial service can be trusted and if it is
reputable in the industry.

There are so many chartered accountants all over the world. Choosing just one
for your company or organization is an overwhelming task. You have to give a
large portion of your time in searching for reputable chartered accountants as
well as financial services. By exerting effort in your research, you will be
able to find a good financial service provider.

It would be best to hire the services of chartered accountants as soon as you
start your business operation. And you know what? Even individuals can hire the
services of these accountants so that they can keep track of their financial
matters, especially taxation.

Money is very important.

Individuals as well as businesses need it for their everyday expenditures. It
is therefore of great importance to keep track of all financial and money
matters. Go ahead and search for the best financial accounting service online
or even locally.

Assets and Liabilities

Making a profit in a business is derived from several different areas. It can
get a little complicated because just as in our personal lives, business is run
on credit as well. Many businesses sell their products to their customers on
credit. Accountants use an asset account called accounts receivable to record
the total amount owed to the business by its customers who haven't paid the
balance in full yet. Much of the time, a business hasn't collected its
receivables in full by the end of the fiscal year, especially for such credit
sales that could be transacted near the end of the accounting period.

The accountant records the sales revenue and the cost of goods sold for these
sales in the year in which the sales were made and the products delivered to
the customer. This is called accrual based accounting, which records revenue
when sales are made and records expenses when they're incurred as well. When
sales are made on credit, the accounts receivable asset account is increased.
When cash is received from the customer, then the cash account is increased and
the accounts receivable account is decreased.

The cost of goods sold is one of the major expenses of businesses that sell
goods, products or services. Even a service involves expenses. It means exactly
what it says in that it's the cost that a business pays for the products it
sells to customers. A business makes its profit by selling its products at
prices high enough to cover the cost of producing them, the costs of running
the business, the interest on any money they've borrowed and income taxes, with
money left over for profit.

When the business acquires products, the cost of them goes into what's called
an inventory asset account. The cost is deducted from the cash account, or
added to the accounts payable liability account, depending on whether the
business has paid with cash or credit.

Budgeting

Ugh, budgeting is one of those topics we'd rather avoid, but in business, it's
an absolute necessity. To prepare a reasoned and thoughtful budget, an
accountant must start with a broad-based critical analysis of the most recent
actual performance and position of the business by the managers who are
responsible for the results. Then the managers decide on specific and concrete
goals for the coming year. It demands a fair amount of management time and
energy. Budgets should be worth this time and effort. It's one of the key
components of a manager's job.

To construct budged financial statements, a manager needs good models of the
profit, cash flow and financial condition of your business. Models are
blueprints or schematics of how things work. A business budget is, at its core,
a financial blueprint of the business. Budgeting relies on financial models that
are the foundation for preparing budgeted financial statements. Those statements
include:

-- Budgeted income statement (or profit report): This statement highlights the
critical information that managers need for making decisions and exercising
control. Much of the information in an internal profit report is confidential
and should not be divulged outside the business.

-- Budgeted balance sheet: The connections and ratios between sales revenue and
expenses and their corresponding assets and liabilities are the elements of the
basic model for the budgeted balance sheet.

-- Budgeted statement of cash flows: The changes in assets and liabilities from
their balances at the end of the year just concluded to the projected balances
at the end of the coming year determine cash flow from profit for the coming
year.

Budgeting requires good working models of profit performance, financial
condition, and cash flow from profit. Constructing good budgets is a strong
incentive for businesses to develop financial models that not only help in the
budgeting process but also help managers in making strategic decisions.

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