We explain what the objectives of accounting in public and private settings are, what the general objective is and other specific ones.
What are the objectives of accounting?
Accounting is a technical discipline whose purpose is the measurement and analysis of the financial and asset situation of a company, organization or individual both public and private, so that it can make informed and responsible decisions, and can be fairly accountable to the laws and society itself.
Therefore, the general objective of any form of accounting is none other than to collect said economic information from the organization or individual, in a systematic, continuous, orderly and verifiable manner, which serves as input for control and management processes.
The latter implies the contrast with the stated goals and objectives, so accounting also provides relevant information to know if the organization is on the right path, at least from a budgetary and financial point of view.
But since accounting is an exercise with so many edges and complexities, different specific objectives can also be identified, that is, smaller purposes or tasks that it must also comply with, and which are those that allow the general purpose detailed above to be met. These include the following:
- Keep an updated and continuous record on the economic operations carried out by the organization, both income and expenses.
- Provide an updated balance at any time of the organization's financial situation, as well as other specific financial information.
- Establish assets in monetary terms of the organization, through the review of its assets and liabilities, so that its economic performance can be evaluated.
- Anticipate financial situations that the organization must or will face in the future, such as business opportunities or financing crises.
- Respond in a reliable and verifiable manner before third parties within the organization or outside it (from the State, for example) regarding audits and legal requirements for the financial year.
- Establish guidelines for budget design of the organization.
Continue with: Importance of accounting
References
- “Accounting” on Wikipedia.
- “General objective of accounting” in the educational platform of the University of Antioquia (Colombia).
- “Accounting objectives” in Emprendepyme.
- “Objectives of accounting” in Solo Accounting.
