Although accounting and accountancy are often used interchangeably, each term actually has its own unique definition and practical uses.
Before we dive into the differences, it’s worth noting that both accounting and accountancy involve recording financial transactions, maintaining accurate records, analyzing financial data and interpreting the results. These skill sets are essential to modern for-profit businesses, government agencies and nonprofit organizations, which is why a Master’s of Accountancy can be a valuable stepping stone for students and mid-career professionals alike. But as individuals hunt down their dream jobs, they may come across an awkward question: What is the difference between accounting and accountancy?
What is accountancy?
In the most basic sense, accountancy is the “profession or duties of an accountant,” according to the Oxford English Dictionary. This includes measuring, processing and communicating financial information, managing detailed financial records, preparing tax documents and keeping track of an entity’s economic resources. In popular usage, however, accountancy is a way to distinguish professional degrees from those focused on the academic side of the field, such as a Master of Science in Accounting. Accountancy, therefore, is often an umbrella term that encapsulates several areas of real-world financial statement management, including preparation, compilation and review.
In practice, the principles of accountancy are identical to the basic accounting concepts students learn in their undergraduate and graduate studies. Accountants, auditors, and bookkeepers working for publicly-traded companies must adhere to a standardized set of rules — referred to as generally accepted accounting principles (GAAP) — set by the Financial Accounting Standards Board (FASB). These include things like the concept of accrual accounting, the revenue recognition principle, the monetary unit principle. The FASB’s standards are also adopted by many non-publicly traded companies to ensure consistency and transparency around accounting practices.
What is accounting?
The American Institute of Certified Public Accountants (AICPA) offers a technical definition for accounting, The AICPA defines 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 financial character, and interpreting the results thereof.” The first phase of this process is often assigned to bookkeepers, as accounting typically starts when financial information has already been recorded and organized. These financial records are used by accountants, financial analysts and other professionals to analyze business performance and expenses, summarize cash flows and revenue streams, interpret financial data and help key decision-makers maximize future investments.
As an industry term, accounting refers to the process of financial statement preparation and analysis, an academic field of study, a profession and more. The catch-all nature of this word partially explains why some students have questions about the difference between accounting and accountancy. Generally, both terms can be used interchangeably when speaking about the occupation or duties of an accountant, though most stick with “accounting” to keep things simple.
Pursuing a career in accountancy or accounting is basically the same thing, with a few minor caveats. For example, an auditor may not be considered an accountant in a technical sense, but their activities certainly fall under the accountancy umbrella. Regardless of what someone may call these professions, the employment of accountants and auditors is expected to grow 6% from 2018 to 2028, according to data from the Bureau of Labor Statistics. Aspiring students and professionals looking to advance their careers have plenty of job opportunities available, but getting a focused education is always the first step to joining any specialized workforce.
How a Master of Accountancy from the University of Nevada, Reno can help kick start your career
The online Master of Accountancy program at the University of Nevada, Reno explores the fundamentals and complexities of advanced accounting principles, taxation laws, financial analysis and more to give students an edge in today’s competitive job market. Through the MAcc program, you can learn a broad range of skills and abilities needed to comply with legal, ethical and regulatory standards while developing actionable solutions to a variety of operational and financial challenges. Students also gain first-hand experience with accounting systems, data transformation, SQL and other industry software that is vital to digital organizations’ long-term success.