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Accounting is a science, and one with a history of centuries. It can also be seen as a form of art. In essence, accounting equates to managing the balancing of the books, or in simpler terms- knowing who owes what to whom and how much. Accounting professionals are both accountants and businessmen. They need to have an understanding not only of the workings behind bookkeeping but also economic conditions governing supply and demand which influence pricing considerations for their clients: commercial entities such as partnerships and corporations, individuals operating businesses on their own behalf, and others such as not-for-profit organizations that may be subject to regulatory oversight by government agencies or other public service organizations such as universities. The accounting principles governing all of these types of entities are different. At the same time, the accountant also needs to understand the goals and objectives of each client. These goals can be quite different for any one client, depending on his or her particular position in business. The objectives of the owners (shareholders) in a corporation, for example, are different from those of staff; while the goals of management within a corporation may differ from those of its staff; while both share some commonality with some other stakeholders such as employees or investors who do not work for the company directly but rather own stock in it. Accounting is the discipline that enables the accountant to define and meet the goals of each client by making sure that not only have accurate records been maintained, but also that the key records of the business have been analyzed and reported upon in a timely manner. In order for accounting to be a science, it has to adhere to set principles of what is acceptable accounting practice. It must be able to demonstrate its credentials as a reliable discipline – not just at one point in time, but over time – so as to create a basis for confidence in its practitioners and their clients. While the theoretical basis of accounting is set out in a set of rules known as 'the Generally Accepted Accounting Principles', or GAAP, these rules are not always followed by accountants in the real world. There is an ongoing debate between those who claim that GAAP has become too complex to be followed by accountants and those who believe that there has been a decline in the ability of accountants to interpret GAAP for their clients. Because accounting strives to be a science it must abide by a set of principles that enables it to be predictive and accurate. These principles are sometimes referred to as 'scientific' principles. They help the accountant understand where he is going and what he needs to get there. It is not enough for an accountant to understand GAAP, but to understand why GAAP works the way it does. In the past year alone the accounting profession has been through a number of upheavals. In May 2004, these upheavals created a crisis of confidence in the public towards accountants and auditors. This crisis resulted in a number of high profile companies including HealthSouth and Adelphia going into bankruptcy because it was impossible for shareholders to know what was going on with their company's finances due to questionable accounting practices or outright fraud by top company officers and auditors alike. cfa1e77820
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