The Nature of Accounting

Abstract

Accounting is a key activity in any organisation, regardless of size or the nature of its activities. An accounting system can provide information on the financial performance of a business for its owners, directors and managers for management purposes, and for the Inland Revenue and the Customs and Excise for tax purposes. In addition, the information may be used by competitors, customers and suppliers to assess the strength of the business, as well as employees, trade unions, pressure groups and others who are interested in the activities of the organisation. Day-to-day accounting information is needed in order to run the business and an accounting system allows a record of all the business’s economic transactions to be kept. In addition, it helps management to make decisions which have financial implications and aids the planning of future activities.