Finance and Accounting



Finance and Accounting

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We can define accountancy as: "the identification, measurement and communication of economic information to enable the users of that information to form sensible opinions and make sensible decisions".

Accounting is surrounded by mystique and "jargon", and, as a professional skill, it requires a high degree of technical expertise. However, it is a very "common-sense" activity and addresses some very basic issues and questions about the nature of businesses and the real-life events, people and activities that make them work.

One of the problems with accounting is that many people focus on the "count" component of the word, and believe that it is no more than counting or "doing the numbers". Nothing could be further from the truth! Look at the complete word! Very few people when asked to give an account of themselves, will express themselves in quantitative terms - shoe size, IQ, height and weight.

Rather, they offer information in qualitative terms - where they live, what they do, their background, likes, dislikes, family, occupation and so on. Indeed they will "tell a story" - which is what accounting strives to do for an organisation - albeit, today largely in financial terms.