Differences Between Accounting and Accountancy

Accounting and accountancy are two terms that are often used to mean the same thing. In reality, though they are similar, there are some differences.

Below, we've outlined the key differences between accounting and accountancy. However, keep in mind that in many situations, people use these terms interchangeably.

What is Accountancy?

Accountancy is a broad field that includes accounting but also includes other areas of financial expertise, such as:

• auditing
• financial reporting
• tax preparation and planning
• overall financial management

The field of accountancy often looks more at the overall theory of accounting. It also covers the multiple duties that an accountant may take on. It's often used to describe the practice of accounting.

What is Accounting?

Accounting refers to the actual practice of accountancy and how accountancy is practically applied to personal and organizational financial data and activities. Accounting is primarily concerned with financial recording and reporting. There are several different fields within accounting. Each field within accounting still uses basic accounting concepts, but these fields are more focused on certain areas within accounting.

Core Differences Between Accounting and Accountancy

The key difference between accounting and accountancy is that accountancy refers to a broader range of fields than just accounting itself. However, the two terms are often used interchangeably.

Educational Requirements

Both those who want to be accountants or want to cover the broader field of accountancy typically need at least a bachelor's degree. In some cases, a two-year associate degree may suffice.

To work as a certified public accountant (CPA), 150 college credits are required for certification, 30 more than are earned in a typical bachelor's degree program. As a result, accountants who want to become CPAs often go on to earn their master's degree, although this is not a requirement.

Career Outlook

According to the Bureau of Labor Statistics (BLS) job growth for accounting and accountancy roles is expected to grow about as fast as the average occupation over the next ten years. However, it depends on your specific field of expertise:

• accountants and auditors: 4% growth
• budget analysts: 3%
• financial analysts: 8%
• financial specialists: 5% growth
• personal financial advisors: 13%
• tax examiners, collectors, and revenue agents

Application in Business

In a business setting, the specific application of someone in accounting or accountancy will depend on their area of expertise. However, there are some general applications.

In business, accounting generally refers to the process of recording and analyzing financial transactions and examining financial statements using an accounting system. Essentially, it's the bookkeeping of a company's finances.

Accountancy, meanwhile, will refer to the broad category of managing and recording finances, including:

• calculating taxes
• evaluating financial performance
• forecasting future liabilities
• summarizing financial information

Advanced Areas of Focus

Both accountancy and accounting have advanced areas of focus. Someone in these fields may be trained in many areas of focus or choose to hone their skills in one.

Focus areas in accountancy may include:

• Accounting: An area of accountancy focused on recording and analyzing an individual or business's income and expenses.
• Auditing: An area of accountancy that offers independent examinations of financial information to ensure everything is accurate and legal.
• Financial consulting: An area of accountancy in which financial experts offer their advice to boost a company or individual's financial health.
• Tax preparation: An area of accounting focused on helping individuals or companies prepare their tax statements.

It's important to note that 'accountancy' isn't generally a career. Instead, it's a field that encompasses careers like:

• auditor
• financial consultant
• accounting professional

There are several different types of accounting. While each uses a similar accounting process, they focus on different clients and situations. Common types of accounting include:

• Cost accounting: A field of accounting focused specifically on the bookkeeping for a company's costs for things like manufacturing, services, and overhead.
• Financial accounting: A field of accounting concerned with recording transactions as well as summarizing and reporting the transactions of businesses and preparing financial records for the public and stakeholders.
• Forensic accounting: A field that uses accounting principles to gather evidence for legal investigations, such as evidence of fraud.
• Managerial accounting: A field of accounting focused on providing information to internal managers of an organization so those managers can make financial decisions.
• Tax accounting: A field of accounting concerned with helping individuals or businesses prepare tax returns, file taxes, or pay taxes.

FAQs About Accounting vs. Accountancy

Below, we've answered some frequently asked questions about accounting versus accountancy.

Is Accountancy the Same as Accounting?

While accountancy technically encompasses a variety of financial concepts, including accounting, the two terms are often used interchangeably.

Is it a Bachelor of Accounting or Accountancy?

While Bachelor of Accounting and Bachelor of Accountancy degrees both exist, in most situations, colleges and universities refer to them as Bachelor of Accounting degrees. However, these degree programs often cover multiple areas of accountancy outside of basic accounting.

What is the Difference Between Accountancy and Management Accounting?

The difference between accountancy and management accounting is that accountancy refers to the field of accounting and financial planning, while management accounting is a sub-field of accounting. Management accounting, also known as managerial accounting, is a type of accounting that provides financial data to an organization's management team so that team can make financial decisions.