About this Introduction to Accounting course
Welcome to this free online Accounting course. We will cover a myriad of topics. We will first journey through a general overview and the history of accounting. Next, we will explore the future trends of the field, as well as challenges and opportunities available. Finally, we will end this course thinking through next steps for accountants.
Accounting Course Navigation:
- What Is Accounting?
- History of Accounting
- Future of Accounting
- Challenges & Opportunities in Accounting
- Next Steps for Accountants
This free online Accounting course directs you toward free podcasts, reading, videos, and resources coupled with questions to aid in processing this critical field. Each individual section is created to encompass approximately two to three hours of learning material.
Whenever you see this icon, it is time to stop and watch, listen, read, or reflect.
At the end of each of the five sections in this course is an opportunity to invest further. These suggestions offer books, associations, or journals within a wide range of financial and time investments, to further studies and enrichment in the field.
1│What Is Accounting?
Accounting is the recording of an organization’s financial transactions through summaries, analysis, and reports on the transactions. The results of the transactions over a specific period are used to create financial statements for the organization that summarize their financial standing. It is an essential function for organizational budget planning, decision-making, and understanding of economic performance.
The Accounting Profession
Accounting for an organization may be done by an in-house or contracted bookkeeper or accountant from a firm or a fleshed-out finance department, depending on the size and needs of the organization. These professionals create reports on the organization’s various finance streams, providing key information to help leaders in the organization make wise, informed decisions.
A bookkeeper generally handles the basic needs of an organization. A Certified Public Accountant or Certified Management Accountant is hired for either larger or more complex accounting needs. If you are considering this field, determining if a CPA or CMA designation is the right fit for you is important. These articles will give you a break down on both CPAs and CMAs.
Accountants have a boring reputation. Spreadsheets and caution toward risk aren’t usually high on most people’s top five favorite conversation topics. But, in this TED Talk, accountant David Boyer makes the inspiring case for why people should actually spend time talking and listening to their accountants. As you watch, spend some time considering your “why” for being in the field of accounting.
Types of Accounting
Financial and managerial accounting are two common, important types of accounting. Managerial accounting is what is used to help the management team make their decisions by providing them with regular financial reports, usually monthly or quarterly. Managerial accountants use budgeting, forecasting, and other types of analysis to help provide the necessary data for the management team.
Listen to this Institute of Management Accountants Podcast about the role that management accountants play in their organizations. Jeff Thomson talks about their critical role, especially during the time of a pandemic. How can you see this role being especially important right now?
Financial accounting is the process of generating financial statements. Financial accountants take the results of transactions during a designated period that they then summarize into a balance sheet, an income statement, and a cash flow statement. This is similar to the information used by managerial accountants, but they use the data in different ways.
These are two big areas of accounting and really are quite different. Watch this video to learn more about five of the key differences between the two. If a career in accounting is what you’re looking at, does one of these branches jump out to you more than the other?
Of course, these aren’t the only types of accounting. Cost accounting is another major branch. It helps an organization determine the cost of their products or services. Cost accountants compile all data relevant to the costs of producing a product or service. Let us note that, in this instance, money is considered an economic factor regarding the production of goods and services. In contrast, it is considered a measure of an organization’s economic performance in financial accounting. Can you pinpoint some other differences between financial and cost accounting? This EDUCBA post lays out 13 main differences between the two types of accounting.
There are many other roles an accountant might pursue. If this is something you’re still considering, learn a bit about auditing or forensic accounting for two more options to evaluate.
Further Thought
If you found David Boyer’s TED Talk to be inspiring, spend some time listening to one of the podcasts he’s hosted. In the Trenches is a podcast hosted by Boyer and Paul Miessner, both Australian accountants, but the content of their podcast extends beyond borders. This podcast is intended to provide support and helpful information to accountants to help them do their work well.
Further Investment
There’s nothing like going back to basics. In addition to finishing this free online accounting course, pick up a copy of Fundamental Accounting Principles. This is widely considered the introductory text for students. Fundamental Accounting Principles are a valuable resource for students to learn key concepts in the field.
2│History of Accounting
History of Accounting
Accounting has existed as long as systems of trade have been in place, with the earliest known records dating back to ancient North Africa and the Middle East. However, more complex accounting was didn’t seem to have come about until around the 15th century when the expansion of the Roman roads led to more interstate trade.
In the late 1400s, Luca Pacioli, who is today known as the father of accounting, wrote the first book on the subject, The Collected Knowledge of Arithmetic, Geometry, Proportion, and Proportionality. Pacioli had a great impact on commerce as a whole.
As you watch this documentary on Pacioli, consider the ways in which accounting is influenced by and influences society in a much broader way than we tend to give it credit for.
Chartered Accounts
In the mid-1800s, the first professional accounting organizations sprang up in Edinburgh and Glasgow. These organizations, the Edinburgh Society of Accountants and the Glasgow Institue of Accountants and Actuaries, respectively, were established through a royal charter. Royal charters are formal documents from a monarch used to grant some kind of power or right to a person or an organization. Hence, the members of these organizations became known as chartered accountants. Today, to be a chartered accountant, an individual must pass years of training and a series of examinations, as well as be committed to ongoing professional development to stay abreast of the field.
As more organizations required accountancy, the demand for professional, reliable accountants, like chartered accountants, drastically increased and became part of worldwide financial systems.
Speaking of chartered accountants, read this document produced by the Association of Chartered Accountants in the United States for a concise overview of accounting from ancient Mesopotamia through to the profession as it is today. Take notice of how, throughout history, accounting has been a linchpin in different societies.
Accounting and Great Divergence
Accounting is now being used to help understand the idea of the Great Divergence, which examines how the Western world shifted to become dominant globally, eclipsing other powerful civilizations across the world. Because of recent developments in understanding historical accounting, historians are now able to use the GDP per capita of medieval economies in Eurasia to understand how the Great Divergence came about.
This paper on Historical National Accounting adds in data from China and seems to indicate that this economic shift began happening earlier than what was originally thought by some scholars, although later than some of the older writers in the field. How do you regard the use of historical accounting data being used in such a manner, and do you think that this is of value?
Further Thought
There is always more to learn when it comes to the history of something as complex and significant as accounting. And it could be argued that a strong grasp of where the field has come from is important to give context and shed light on why accountancy looks as it does today. Accounting History and Accounting Progress examines the idea of “progress” in the field by exploring the history from the 18th century.
Further Investment
If the historical context of the accounting field is of particular interest, consider subscribing to the Accounting Historians Journal: A Journal of the Academy of Accounting Historians Section of the American Accounting Association. This is an international journal that addresses the development of accounting, in large part, by researching how a historical understanding impacts contemporary issues in the field. The journal comes out twice a year.
3│Future of Accounting
Accounting is one of those industries that seems like a solid, stable choice when it comes to careers. And that’s probably not unfounded. The U.S. Bureau of Labor Statistics anticipates a four percent increase in employment for accountants and auditors between 2019 and 2029. Nevertheless, there is a need for accountants to change with the times, as is true with any other profession.
Rules, Regulations, Standards
The Financial Accounting Standards Board is a nonprofit oversight organization whose job is to establish and improve upon current Generally Accepted Accounting Principles in the United States. The FASB replaced the American Institute of Certified Public Accountants’ Accounting Principles Board in 1973. When it comes to looking to the future of financial accounting, the FASB plays a big role.
Read this interview on Financial Accounting and Reporting with Marsha Hunt. She has been serving a five-year term on the board since 2017. This interview highlights some of her insights into the future of accounting. What challenges or opportunities do you foresee when it comes to compliance and standards in the field?
If you have an interest in compliance and regulations, this article on Auditing and Accounting covers new enforcements from Security and Exchange Commissions as of 2020. It’s dense, but considering the importance of rules and standards in the industry, it’s wise to give yourself some background in what’s going on.
Remote Work, Delays, and Other COVID-19 Considerations
By this point, it seems redundant to state that the COVID-19 has impacted the field of accounting. Nevertheless, these impacts are shaping the future in real and present ways. This Journal of Accountancy Podcast discusses behaviors that have come about during the pandemic and how accountants can respond. Have you personally seen these patterns emerging? If so, how have you seen businesses respond in turn?
From an insider perspective, PricewaterhouseCoopers has a podcast. Of particular interest is a series of episodes they’ve pulled together that address COVID-19 and current market realities. Since, as we’ve already discussed, much of the future of accounting is tied up in regulations and standards, this episode is of particular interest. It covers how the FASB has addressed concerns during the pandemic.
Given the importance of accurate financial reporting, it’s probably safe to assume that the future of accounting is secure. Nevertheless, like all industries, it must evolve or die, as it were. Spend some time reading this two-part article on the future of accounting. From your vantage point, do you agree with the author’s points? What do you see as the future for the field?
Further Thought
There’s so much to learn when it comes to what’s going on in the world of accounting and what’s coming next. Here is a list of 21 accounting podcasts to check out for hours worth of thought-provoking and edifying content.
Further Investment
Join the American Accounting Association. Founded in 1916, the association is a future-shaper in the field through research, teaching, and networking. Many in the association are faculty members, but membership is open to those in practice but are not involved in academia. As a member, you’ll have access to a massive digital library, reduced pricing for article submission to their journals, and access to discounts for meetings and continuing professional education credits. There are also opportunities to volunteer within the association, access to the career center, and membership to interest sections and regional sections for networking.
4│Challenges & Opportunities in Accounting
The Cloud
The cloud isn’t really the future at this point. It’s the present. But the cloud isn’t going anywhere, and its efficacy in the field of accounting is only going to continue to expand. The cloud is a huge benefit for accountants. It allows clients and accountants access to data anytime and anywhere. Clients are able to pull real-time financial reports easily, accountants are able to provide ongoing monitoring, and data is more easily shared.
Remote work is the current standard and may remain so indefinitely. Aside from the ease, the cloud is now almost a necessity. Not only that, but cloud software is wildly more affordable than former financial suites. Additionally, because of the ease of use and the low cost-barrier, cloud accounting software allows smaller firms to be able to take on an increased client load.
Quickbooks is one of the biggest names in accounting software. In this cloud accounting article, they discuss what the cloud and AI do for accountants. Some of the benefits are quickly obvious. Are there others that surprised you?
Automation & AI
Technology is taking on an ever-increasing amount of work that accountants formally did. Much as the cloud is already here, so is AI. Things like accounts payable, procurement, expense management, and purchasing can all be handled to a large extent by artificial intelligence. Connected to the real-time data benefits of the cloud, automated financial reports increase efficiency for clients. This doesn’t mean that accountants are no longer needed, however. Rather, it frees accountants up to do deeper analysis into possible areas of growth for their clients. AI can create financial reports, but humans are still needed on a deeper analytical level with thoughtful recommendations on forecasting or viability. The key here, then, is that accountants are no longer tied up in expensive data mining but rather will need to provide value through their analysis.
Here is a rather extensive accounting trends report on 11 trends to pay attention to right now and in the near future. Take note of the number of firms that are not currently using technology like cloud and AI, but the takeaway is that both in various ways are going to be increasingly used in the field.
Benefits & Challenges of Remote Work
As we already explored, remote work changes accounting realities. This accounting and tax course covers some of the benefits and challenges when it comes to things for accounting firms to consider with this expansion of remote work.
Further Thought
The University of Cork in Ireland hosted a webinar on how the accounting industry has responded to the current pandemic, exploring both the challenges and opportunities. The webinar covers, among other things, the experience with remote work and how financial reporting and auditing are being impacted by the pandemic. While this webinar is coming from an Irish perspective, because the pandemic is a worldwide phenomenon, there are takeaways that apply to the American perspective as well.
Further Investment
Continuing education is an important aspect when it comes to a career in accounting. This is especially true considering the necessity of understanding new and upcoming rules and regulations in the field. myCPE offers both free and paid continuing education credits through webinars and on-demand videos with timely and up-to-date content. Once this free online accounting course is completed, check out one of their courses. The courses on their platform are approved by both the NASBA and the IRS. Currently, they have a section devoted to COVID-19. The courses offered span a wide variety of topics, from auditing and taxes to statistics and more. In addition, they are currently offering an entire selection of free ethics courses.
5│Next Steps for Accountants
Get Tech-Savvy
We all know that technology is our present and our future, regardless of our industry. And we’ve already discussed some of the challenges and opportunities for accounting with cloud and automation technologies. It’s always wise to keep up on the latest in accounting technology, though, and have an idea of why and how they work and how to leverage them to make the most of their benefits. Here’s a great accounting technology guide to help you do that. It covers cloud, blockchain, cryptocurrency, and more. As you read through the suggestions, which technologies are you already familiar with or employing? Are there others that you could see being smart to implement?
Jody Padar is one of Accounting Today’s 100 most influential people in the industry. She is known for influential changes within the field with The Radical CPA, along with serving as the VP of Strategy with Botkeeper. In this article, Padar discusses some of the barriers that are currently confronting accountants, which at this point, shouldn’t be at all surprising. What are some themes you’re seeing in terms of challenges, opportunities, and direction for accountants?
Innovation
Innovation isn’t a word usually used alongside accounting. And there are reasons for this. Accountants are by trade, risk-averse, and while analyzing what has happened can be useful for innovation, there must also be the much riskier predicting of the future. This, coupled with the necessity of being compliant and work within regulations, are two major barriers when it comes to innovation in accounting. But accountants also play a pivotal role in the economy and general, overall trends. In a time where innovation for the health and well-being of the planet and its people is of timely, vital importance, business as usual won’t cut it.
In this TED Talk, Richard Mattison discusses the idea that reimagining how we value natural resources within our current economic systems can help improve environmental degradation. Considering this idea, what are the ways to rethink value, risk, losses, and gains in accounting to provide innovative solutions to some of our world’s issues and provide benefits to a client?
In other, very real ways, the accounting profession is facing a serious need to innovate today, not in small part due to the COVID-19 pandemic. Accounting Today did a survey on the impact the pandemic has had on the profession. Jody Padar, from The Radical CPA and VP of Botkeeper, interviewed Daniel Hood, who is the editor-in-chief of Accounting Today, to discuss the findings of the survey. As you watch their discussion, consider what of these impacts will be lasting, what will be temporary, and what can be used as a catalyst for innovative change for the field.
Further Thought
Sign up for Accounting Today. Registration is free, and it gives you unlimited access to their digital content as well as sign up for newsletters tailored to your interests. You can also check out their podcast, which has an extensive back catalog of episodes to listen to.
Further Investment
Even if you’ve been in the field for some time, it’s always good to continue your education and professional growth. And one of the simplest ways is by reading widely. Here is a blog post with 15 highly recommended accounting books. These books cover a swath of the field for the newcomer and the entrepreneur all the way to the small business owner and beyond.
This is the end of our free online accounting course. We hope it gives you a good background on the topic!