what are the different types of accounting 
accountants may be tasked with recording specific transactions or working with specific sets of information for this reason there are several broad groups that most accountants can be grouped into financial accounting refers to the processes used to generate interim and annual financial statements the results of all financial transactions that occur during an accounting period are summarized in the balance sheet income statement and cash flow statement the financial statements of most companies are audited annually by an external cpa firm for some such as publicly traded companies audits are a legal requirement however lenders also typically require the results of an external audit annually as part of their debt covenants therefore most companies will have annual audits for one reason or another 5managerial accounting uses much of the same data as financial accounting but it organizes and utilizes information in different ways namely in managerial accounting an accountant generates monthly or quarterly reports that a business s management team can use to make decisions about how the business operates managerial accounting also encompasses many other facets of accounting including budgeting forecasting and various financial analysis tools essentially any information that may be useful to management falls under this umbrella just as managerial accounting helps businesses make management decisions cost accounting helps businesses make decisions about costing essentially cost accounting considers all of the costs related to producing a product analysts managers business owners and accountants use this information to determine what their products should cost in cost accounting money is cast as an economic factor in production whereas in financial accounting money is considered to be a measure of a company s economic performance while financial accountants often use one set of rules to report the financial position of a company tax accountants often use a different set of rules these rules are set at the federal state or local level based on what return is being filed tax accounts balance compliance with reporting rules while also attempting to minimize a company s tax liability through thoughtful strategic decision making a tax accountant often oversees the entire tax process of a company the strategic creation of the organization chart the operations the compliance the reporting and the remittance of tax liability 