What Accounting And Finance Is And Why It Has An Important...

INTRODUCTION This report focuses primarily on the understanding of what Accounting and Finance is and why it has, and will continue to be, an important aspect of any business - further exploring its subsequent relevance in guiding those who work in these areas. WHAT IS ACCOUNTING? Accounting, a practice which goes back many millennia, arises from the concept which Britton and Waterston (2005, p. 03) believe came about when managers (known then as stewards) had to â€Å"account for their stewardship of the owners’ money†. Fundamentally, this idea brought forward by Britton and Waterston, is possibly a leading factor when trying to understand what accounting is which is defined by the Institute of Chartered Accountants in England and Wales†¦show more content†¦While this may be the case, the final aim of preparing all these documents is to assist people by communicating to them information on which they will subsequently make a decision on. WHAT IS FINANCE? Finance, similarly to accounting, assists people with their decision making. The difference being that finance focuses mostly on the way a business entity raises and invests funds. According to an extract from the University of North Carolina Wilmington titled, â€Å"What is Finance?†, â€Å"finance incorporates the study of money and other assets, the management of those assets and being able to profile and manage project risks†. In this way, it is clear to see how accounting and finance are linked because without accounting information, none of the above incorporations would be possible. Finance can be divided into three categories: public, personal and corporate finance. ïÆ'Ëœ Public finance is the study of the role of the government in the economy and how resources are allocated (Atkinson and Stiglitz. 1980) ïÆ'Ëœ Corporate finance is the area of finance which dealt with the way a business sourced funds and used them to increase the overall value of the business. ïÆ'Ëœ Personal finance is simply the finance that an individual deals with taking into considerations risks and future events. TYPES OF ACCOUNTING There are various types of Accounting which serve different purposes but are of equal significance when it comes to the well-being and