It is not true that accounting is all about numbers

It is not true that accounting is all about numbers

It is not true that accounting is all about numbers. Whereas you numerically present the accounting information, it is all of the additional business advice and the counseling that accounting brings to the table.

Accounting is the art of recording, classifying, summarizing, analyzing, and interpreting business transactions that are at least of a financial character and communicating the end-users.

Its resultant reports describe the financial condition of an organization. Accounting provides a framework for looking at past performance, current financial health, and possible future performance. It also provides a framework for comparing the financial positions and performances of different firms. Interpreting financial reports enables entities to evaluate two companies and choose the one that is more likely to be a good investment.

In achieving its objectives of ascertaining operational performance, determining the financial position of the business, to protect business property, to verify the taxable income and tax liability, to keep systematic records, to facilitate rational decision making and as a tool of control, accounting proves that it is a process that can benefit an entity and its stakeholders by understanding what those numbers mean. It means that accounting is more than just numbers and reports.

It is fair to recognize accounting as the backbone of any business, providing a framework to understand its financial condition. Reading about accounting irregularities, fraud, audit shortcomings, out-of-control business executives, and bankruptcies, we have become acutely aware of the importance of accurate financial information and sound financial procedures.