Accounting Firm and CPA Key Terms

Terms to know for CPA and accounting firm standards and types

Accounting firms and CPAs record and report financial transactions. CPAs service individuals as well as businesses, and even government entities. Depending on the type of service necessary, the financial accounting differs as do the industry standards. The following key terms will help you differentiate the types of accounting that CPA firms and general accounting firms handle. There are also various accounting boards that set the accounting standards to which CPA firms must adhere.

Public accounting

These are accounting activities-such as tax services, general auditing and preparation of financial statements and reports-that CPAs provide to the general public.

Financial Accounting Standards and the Financial Accounting Standards Board (FASB)

Financial Accounting Standards are standards for accounting services set by the FASB. These standards are included in the Generally Accepted Accounting Principles, or GAAP.

Managerial accounting

This is the area of accounting that deals with reporting to internal company management. Management accounting deals with the early part of the financial chain, the planning and execution stage. Public accountants come in at the end stage; auditing and tax functions verify managerial accounting records.

Generally Accepted Accounting Principles (GAAP)

The Generally Accepted Accounting Principles, or GAAP, are the basic guidelines and standards for all accounting and financial reporting in the United States. Guidelines vary slightly depending on whether the financial reporting is governmental or non-governmental.

Federal Accounting Standards Advisory Board

The Federal Accounting Standards Advisory Board sets accounting and financial reporting standards for United States government entities to promote public accountability and to develop an efficient and effective system for government financial reporting.
Federal Accounting Standards Advisory Board for greater detail.

International Accounting Standards Board (IASB)

The IASB was developed to encourage uniform standards for international financial reporting. These standards are meant to ensure work of the highest quality that can be understood internationally.
International Accounting Standards Board for greater detail on its mission and standards.

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