What are the Types of Accounting Services?

Accounting has been described as the bloodline of any business. Whether you’re
monitoring inventory, recording sales, or checking for inconsistencies, you are already
applying basic accounting principles. But of course, professional accountants have been
trained to perform the same routines but in a more organized, accurate, and effective
way.
That is why when some business owners look at accounting as simple recording and
computing, they get surprised by how complex it is watching a professional do it.
Accounting’s flexibility allows it to be one of the most adaptable services. It can be
applied anywhere between our personal lives up until government finance.
Here are some of the most common types of accounting services available in the
market.
Major Types of Accounting Services
Public Accounting
Accountants who are not exclusively tied to a single company are the ones that perform
Public accounting. Some of the processes involved in public accounting are preparation,
review, and audit of financial statements, tax preparation, and consultation or advisory
services.
This type of service is often performed by Certified Public Accountants (CPA). CPAs
often undergo rigorous training before they take examinations required to get them
accredited. (1)
Management Accounting
Management accounting is a process wherein accounting professionals analyze past
and present accounting data to synthesize an effective and efficient business model for
their client. Some of the processes under management accounting include budgeting,
asset management, cost management, and performance evaluation.
Management accounting is also known as advisory services. Its primary function is to
improve the client’s use of its capabilities and resources to achieve the objectives of the
organization. In short, it aims to help internal users analyze management problems or
opportunities. (2)
Governmental Accounting
The largest finance body in any country is the government itself. That is why it should
be no surprise that particular types of accounting services are formulated to cater to its
needs. Accounting bodies created government accounting to tackle specific issues
present in the government that is not in businesses.
The main objective of this service is to help government sectors properly budget and
allocate their resources, making sure that each decision is in consonance to both local
and national law. Hence, this type of service is one of the most flexible due to varying
laws per locality.
Internal Auditing
Large companies often have issues assuring the accuracy and reliability of their
financial statements. It is because, as much as we want it to be otherwise, there is
always the possibility of mistakes, or worse fraud occurring in the preparation of
financial statements.
Internal auditing aims to detect possible departures from set accounting standards.
Managers of often employ this service at the end of financial cycles. This type of service
does not involve the preparation of services since the responsibility of auditors is limited
to giving opinions regarding the reliability and accuracy of financial statements. (3)
Other Types of Accounting Services
Bookkeeping
Accountants consider bookkeeping as one of the most basic accounting services. It is
often the first step in the preparation of financial statement since it involves the
recording of business transactions of the entity.
Many small and medium enterprises make use of this service since it is significantly
cheaper and simpler in comparison to other services. You can check out Aldaris’
bookkeeping services here.
Tax Accounting
Tax accounting is a service focused primarily on the business’s tax liabilities or claims. It
is another accounting service that is heavily affected by local and national codes.
A country’s Internal Revenue Code determines how an accountant applies tax
accounting to a company. Tax accountants aim to minimize a business’s tax liability
without violating any laws or accounting standards. (4)
Forensic Accounting
Forensic accounting can be compared to auditing; however, its main focus is to detect
malicious fraud. Forensic accountants are required to have an in depth knowledge of
laws that could help them determine violations by concerned parties. Law enforcement
agents often use this service when investigating financial related crimes.
External Auditing
External auditing follows the same processes of internal auditing. The difference lies
with who uses the audit opinion created. Whereas internal audit opinions are used by
internal users such as managers or board of directors, external audit opinions are used
by external users such as investors. (3)
The financial sector is becoming more complex and fluid. Hence, it is only right that new
and more specific services are created. This results in the Accounting field getting wider
and wider as time passes by. This is to cater to the changing needs of businesses.
With this said, every manager or business owner must have at least a minimal
knowledge of the differences of these services. So that they could choose which
accounting service best fits their needs.