Abstract
A largely accepted language is required for a business or organization to effectively communicate its results and position to stakeholders, which is why accounting has come to be known as the "language of business". Accounting is really the means for providing financial information to others. Financial analyst then take the data the accountants have compiled in the form of reports, and make educated guesses at what their company should do next. David ballast (1996) stated, "The fact remains that accounting and finance are the primary tools for reducing business problems and opportunities to a common denominator, setting goals, measuring results, and making decisions." (p. 1)
Accounting & Finance
Distinguishing between Accounting & Finance
Both accounting and finance deal with money and assets; however, they are categorically different concepts. This portion of the essay will discuss the dissimilarities between accounting and finance. Examples of different concepts will be given for both practices.
Accounting as a discipline is more of a law, whereas finance is more of a theoretical practice. Accounting has clearly defined guidelines, rules and regulations. As defined by Wikipedia (2005), "accounting is the measurement, disclosure or provision of assurance about information that helps managers and other decision makers make resource allocation decisions".
Two key disciplines in accounting are financial accounting and auditing. Financial accounting involves processes by which financial information about a business is recorded, classified, summarized, interpreted, and communicated (Wikipedia, 2005). Auditing is a related to financial accounting, but it is a separate discipline. "Auditing is the process whereby an independent audi ...