Technical Accounting – What is it? The term “technical accounting” refers to the execution, analysis, and oversight of accounting systems within specific corporate contexts. While any accountant should be well-versed in general accounting theory, a technical accountant is required to demonstrate additional competence in the execution of booking transactions within accounting systems, understanding how those transactions will affect the accounting system, and properly assessing whether a transaction is properly entered and generating accurate output. A technical accountant should be able to review previous work (either done by themselves or by others) and readily determine its accuracy. These skills will often drive toward additional roles including the analysis of accounting systems, determining the effectiveness of internal controls, and making recommendations to management regarding potential modifications to an accounting system. Technical Accounting vs. Accounting Accounting, as a general term, refers to the idea of aggregating financial (or other) data for the purposes of producing reports to be used by management or other interested parties in evaluating the trajectory and value of an organization or undertaking. Technical accounting refers to the specific efforts, including the entries, adjustments, analyses, controls, and other efforts that go into converting data into useful output. To make an analogy, baking refers to the activity of taking ingredients and converting them into a loaf of bread. A general theory exists that ingredients are baked and produce a baked good. Technical baking might refer to identifying those specific ingredients, developing the specific enumerated recipe, and ensuring that the baker properly identifies and quantifies each ingredient, sets ovens at appropriate temperatures, and adheres to the appropriate baking time to produce the actual loaf of bread. If a substandard loaf is produced, the technical baker would study the loaf to identify where the failure occurred in the baking system and modify the system accordingly to enable the baker to produce a proper loaf of bread in the future. Firms, particularly public accounting firms, rely on technical accountants to assist them in evaluating clients’ accounting systems and perform checks of accounting reports to determine whether accounting errors may have occurred. Simple examples of Read More »
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