In general, there are various classifications of accounting. However, the U.S. Department of Labor has categorized accounting into the following:
Public accounting is the branch which usually deals with issues like taxation, insurance, profit management and financial accounting of companies. The major role of public accounting is to assess the financial information of a company and make it available to investors, managers, tax authorities and other decision makers who are involved in the process.
Management accounting encompasses areas of accounting like cost accounting and financial analysis. The role of management accounting is to assess the transactions the company is making and to maintain them in order to provide in depth analysis by the year’s end. Management accountants are therefore responsible for creating financial strategies based on the data they have collected. Management accountants are also responsible for corresponding with internal auditors to make sure all records are up to date, verified and accurate before further policies are made based on them.
Internal auditing is a very strict form of accounting. Previously, not much significance was given to this particular type, and that resulted in various fraudulent activities. Today, however, federal regulations have become stricter when it comes to internal auditing. The main role of internal auditing is to maintain financial integrity and records of the organization to assure all records are accurate. It is the responsibility of the internal auditor to check and verify the financial records of the company before they are handed over to third party auditors.
Government accounting is about maintaining the financial records of government organizations, auditing companies, and other similar organizations that are bound by federal regulations. Some government accounting companies also work indirectly for the Internal Revenue Service. The two major branches of government accounting are government budgeting and cost analysis.