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Accounting is the production of financial records such as financial statements and contains the principles which are applied to bookkeeping and auditing as well as accounting. Accounting deals with the organized recording and analysis of financial activity. Bookkeeping is the procedure that keeps basic financial records and tracks income and expenditures as well as provides information that is used by businesses.

Accounting and bookkeeping are often used interchangeably, they are not synonymous terms.

Accountants often begin their careers as bookkeepers, since the entry requirements are lower while the pay is still good. While requirements may differ slightly from jurisdiction to jurisdiction, an individual can become a bookkeeper through on-the-job training or certifications. On the other hand, accountants are degreed and may be licensed Certified Public Accountants, although not all accountants are CPAs. The CPA is a professional designation given to qualified accountants. To become a CPA, an accountant is required to pass an examination known as the Uniform CPA Exam. Additionally, CPAs must hold a bachelor's degree in business administration, finance, or accounting, complete additional educational requirements, and have a minimum of two years of experience in public accounting.

On the other hand, someone might be able to find a job as a bookkeeper if they are good with numbers and details. While in school to become an accountant, aspiring accountants often work as bookkeepers. While they would not be eligible to become CPAs in most jurisdictions, bookkeepers who do very well at their jobs might be promoted to accounting positions.

Bookkeepers are responsible for recording journal entries and overseeing bank reconciliations. They may also be involved in reviewing budget and invoice data for errors, and regularly recording transaction reports.

The accounting cycle is an eight-step process of recording and processing the financial transactions of a company. These steps consist of identifying transactions, recording transactions in a journal, posting transactions to the general ledger, preparing an unadjusted trial balance, analyzing a worksheet, adjusting journal entries, preparing formal financial statements, and closing the books.

Bookkeepers are typically responsible for carrying out or overseeing the first six steps of the accounting cycle, while the remaining steps are handled by an accountant, although accountants are qualified to manage each of these steps.

Different accountants have various areas of expertise and may play different roles. For example, there are public accountants, management accountants, government accountants, forensic accountants, and tax accountants. In large part, the differences are in who employs the accountant. An accountant may be employed by a single large corporation, government agency, or other entity, in which case he or she would specialize in whatever needs the employer had. Conversely, an accountant might be employed by an accounting firm that handles a large number of clients, but may still specialize in a specific type of accounting, although accountants in small firms could take on a variety of clients.

Like other professional fields, the accounting and bookkeeping industries involve a number of professional and regulatory organizations or associations. These include, but are not limited to, the American Association of Financing and Accounting, the Institute of Internal Auditors, the Institute of Management Accountants, the Professional Association of Small Business Accountants, the Young CPA Network, the National Association of Certified Public Bookkeepers, and the American Institute of Professional Bookkeepers, as well as the American Institute of Certified Public Accountants, the Financial Accounting Standards Board, and the Governmental Accounting Standards Board. Similar, but different, agencies and associations are in place in other countries. For example, Canada has the Chartered Professional Accountants of Canada, and the Accounting Standards Board, Canada.

Topics related to accounting and bookkeeping in general, or on a national or worldwide scale, are appropriate for this portion of our guide, although local accounting or bookkeeping firms should be listed in the appropriate Local & Global category that corresponds to their geographical location.


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