What Are the Four Types of Accounting?
The main types of accounting are: corporate, public, government and forensic. Although it can be a little tricky because accounting services can be broken down in a myriad of different ways, depending on how you want to look at it. We’re going to look at 4 broad categories here, then drill down into some more specifics that you might get into within each one. Let’s look at the types of accountants and what they do in more detail.
What Are the Main Types of Accountants?
Corporate accounting involves the gathering and use of financial information about a company, often for tax compliance or external reporting. Generally corporate accountants will work within the company and some of their roles could be as an analyst, bookkeeper, or in financial management.
Public accountants work with clients who can be individuals or businesses (rather than being employed by the business as in corporate accounting). They can gather, organize and prepare statements about their clients' finances and often prepare and file tax returns. A certified public accountant, or CPA, is a type of public accountant many of us are familiar with.
Government accounting relates to the finances or budget of various governmental agencies, at the federal, state or local levels. These types of financial accounting can include auditing, analyzing budgets for various programs, and following strict reporting guidelines.
The last main branch of accounting to explore is forensics. It is most commonly used in legal settings and works to recreate financial records when they’re missing or incomplete. This may be to detect waste or misuse of funds within a business, or investigate claims of fraud by external sources.
How Many Types of Accounting Services Are There?
Although it may seem confusing, there is another way to think about dividing up the different things accountants do. With the above list, we were looking at the different places accountants could work and how the focus of their services would be different depending on their environment. But another way to think about the 4 types of accounting is to think about what accountants might do.
A tax accountant prepares tax documents of businesses or individuals, files taxes, and advises on matters of tax compliance and legal tax reduction. They will have specialty knowledge of tax laws and regulations, often specific to the type of clients they work with or local and state level specific taxes within their geographic area.
An auditing accountant focuses on reviewing and examining the accuracy of financial statements. This can include the mismanagement, fraud, and waste in finances. More often, an audit or review is driven by a bank or insurance provider that requests an external party verify the accuracy of financial statements.
Bookkeeping is the foundation for all accounting work, because recording accurate financial information makes everything else possible. An accountant focusing on bookkeeping may help a company develop and maintain protocols for generating accurate records, or help individuals understand what information they need and how to organize it for a clear understanding of their financial position.
There are certain very specific areas within accounting that require specialized skills not common for all accountants. These include international, fund (work with non-profits), political campaign, and fiduciary (manage assets of another person, like a trust). The types of accountants will work with very specific clients that require knowledge of financial rules and tax regulations in these particular settings.
So How Many Accounting Types Really Are There?
The not-very-satisfying, but accurate answer, is that it depends. It depends on exactly what you mean by types, and how detailed you want to be. If you separate each of the 4 areas accountants can work in by each of the 4 jobs they can do there, you’re looking at about 16 different types. Or you could divide them more broadly and say there’s only 2 types; public and private, or data collecting and data analyzing, or public sector and private sector. There is also a lot of overlap between these roles, with one accountant often being able to fulfill multiple needs for a client with their own expertise.
How to Choose The Best Type for You
The important thing is to understand the basics of all these different roles, because it gives you a good foundation to understand accounting as a whole. Knowing how many specialties there can be within accounting can make the decision of what kind of accounting services is right for you easier. At Delta Wealth Advisors, we understand how complex individual and business finances can be, and how important it is to choose the right team to fill all the roles you need. That’s why we have gathered experts in many different accounting branches that can all work together to help you make the financial decisions that are right for you! Schedule a call today to answer your questions and learn how we can help you.