66.Accounting (accountancy) services as a part of financial services market infrastructure.

Accounting, or accountancy, is the measurement, processing and communication of financial information about economic entities. Accounting, which has been called the "language of business", measures the results of an organization's economic activities and conveys this information to a variety of users including investors, creditors, management, and regulators. Practitioners of accounting are known as accountants. The terms accounting and financial reporting are often used as synonyms.

Accounting is facilitated by accounting organizations such as standard-setters, accounting firms and professional bodies. Financial statements are usually audited by accounting firms, and are prepared in accordance with generally accepted accounting principles (GAAP). GAAP is set by various standard-setting organizations such as the Financial Accounting Standards Board (FASB) in the United State and the Financial Reporting Council in the United Kingdom.

Financial accounting is the preparation of financial statements that can be consumed by the public and the relevant stakeholders using either HCA or CPPA. When producing financial statements, they must comply to the following:

• Relevance: accounting which is decision-specific. It must be possible for accounting information to influence decisions. Unless this characteristic is present, there is no point in cluttering statements.

• Materiality: information is material if its omission or misstatement could influence the economic decisions of users taken on the basis of the financial statements.

• Reliability: accounting must be free from significant error or bias. It should be capable to be relied upon by managers. Often information that is highly relevant isn’t very reliable, and vice-versa.

• Understandability: accounting reports should be expressed as clearly as possible and should be understood by those at whom the information is aimed.

• Comparability: financial reports from different periods should be comparable with one another in order to derive meaningful conclusions about the trends in an entity’s financial performance and position over time. Comparability can be ensured by applying the same accounting policies over time.

67. Accountancy services: financial accounting.

Financial accounting (or financial accountancy) is the field of accounting concerned with the summary, analysis and reporting of financial transactions pertaining to a business. This involves the preparation of financial statements available for public consumption. Stockholders, suppliers, banks, employees, government agencies, business owners, and other stakeholders are examples of people interested in receiving such information for decision making purposes.

Financial accountancy is governed by both local and international accounting standards. GAAP (which stands for Generally Accepted Accounting Principles) is the standard framework for guidelines for financial accounting used in any given jurisdiction. It includes the standards, conventions and rules that accountants follow in recording and summarising and in the preparation of financial statements. On the other hand, IFRS (International Financial Reporting Standards) is a set of international accounting standards stating how particular types of transactions and other events should be reported in financial statements. IFRS are issued by the International Accounting Standards (IASs). With IFRS becoming more widespread on the international scene, consistency in financial reporting has become more prevalent between global organizations.

Financial accounting and financial reporting are often used as synonyms.

According to International Financial Reporting Standards the objective of financial reporting is: To provide financial information about the reporting entity that is useful to existing and potential investors, lenders and other creditors in making decisions about providing resources to the entity.

Five components of financial statements: Statement of Financial Position (also called Balance Sheet), Profit and Loss Statement (also called Statement of Comprehensive Income),Statement of Cash Flows, Statement of changes in equity, Notes to the financial statements.