Corporate accounting is the branch of mathematical science that is concerned with discovering the causes of a business’ success or failure. Corporate accounting is concerned with communicating financial information about a business to the company’s shareholders and managers.
The most typical method of communicating this information is through financial statements which show in monetary terms the economic resources in the possession of the company. The primary concern of corporate accounting, and the reason it is sometimes considered an art rather than a science, lies in selecting the information that is both relevant and reliable.
The three branches of accountancy are accounting, bookkeeping, and auditing.
The American Institute of Certified Public Accountants defines corporate accounting as “the art of recording, classifying, and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of a financial character and interpreting the results thereof.” One of the primary issues of accounting is keeping track of corporate loans, whether these corporate loans are incoming corporate loans or corporate loans made to other corporations.
At its beginning, accounting existed in order to assist the memory of businessmen. Corporate accounting only began to resemble its modern form after double-entry bookkeeping and joint stock companies, the first common types of corporations, developed. These joint stock companies led to the three current branches of corporate accounting, with management accounting handling internal purposes, financial accounting handling external affairs, and independent, external auditors attesting that the management and financial accounting reports were accurate and adhered to regulations.