Accountancy – What does it mean?

Simply stated, “Accountancy” relates to the profession and/or duties of accountants. It includes the systematic process of recording, identifying, measuring, summarizing, verifying, classifying, interpreting, and/or communicating an individual’s or a company’s financial information. Accountancy reveals a profit/loss overview for given periods as well as the nature and value of a firm’s or an individual’s liabilities, assets, and equity.

In the second part of this article, we’ll look at whether Accounting is an art or science, and there are good arguments for either point of view. To start the discussion, let’s look at this interesting ICC Consultant video.

It is the purpose of accounting to accurately accumulate, report, and identify all relevant financial information about an individual’s or a company’s financial position, performance, and cash flow. This information may be used for fiscal purposes, to reach strategic decisions on how to best manage a business, or for investment or lending purposes.

Accounting includes various meanings. It can and usually does refer to the process of maintaining or keeping financial records. Accountancy, on the other hand, refers specifically to the duties that come with the profession and work of accountants, which include bookkeeping, accounting, auditing, and so on. The five core subjects for accountancy are Financial Accounting, Management Accounting, Tax, Auditing, and Commercial law.

Is Accounting Science or Art?

Well, the opinions differ. Some experts say accounting is an art and some see it as science, and there are also those who say it’s a combination of the two. From the definition of Accounting, it’s not very clear.

If it is Science, it would mean there’s a systematic knowledge body that’s based on very definite principles and rules with a definite relationship as to cause and effect. It would be Art, on the other hand, if you look at it as the technique to help achieve a desired goal in the best feasible manner.

Those who see Accounting as Science say that the profession has its own set of principles and techniques. Based on systematically applying those principles and techniques, the results of a business or individual are revealed. They feel that because of this, Accountancy is a Science.

Those stating that Accountancy is an art, come up with the arguments that, as all business people record business transactions in books as per rules, in line with the business’s nature, results are determined after analyzing, which, in their view, makes it an Art. It may be clear that the discussion isn’t over yet and that the profession of “Accounting” includes both elements of Science and Art.