[Accounting Role] What is Accounting?

Hello, I’m Unlock, a current accounting professional here to open doors for you in job searches and career transitions.

Today, I received a question: “What is accounting?” So, I’d like to share my thoughts on this.

 

Many people might think of accounting as merely recording numbers, but it serves a much more critical role.

merely : 단지, 그저라는 의미로, 어떤 것이 중요하거나 특별하지 않고 단순히 그것뿐임을 강조할 때 사용합니다. 예를 들어, “He’s not angry; he’s merely tired.”는 “그는 화난 것이 아니라 단지 피곤할 뿐이다.”라는 뜻으로 해석됩니다.

If I were asked, “What is accounting?” I would answer, “Accounting is a compass.”

compass : 나침반을 뜻하며, 방향을 알려주는 도구로, 길을 찾거나 올바른 방향을 결정할 때 사용됩니다. 비유적으로는 안내자 또는 지침이라는 의미로도 쓰여, 어떤 상황에서 올바른 방향을 제시해주는 것을 의미할 수 있습니다. 예를 들어, "Accounting is a compass for a company"는 "회계는 회사의 나침반이다"라는 뜻으로, 회사가 나아갈 방향을 제시해주는 중요한 역할을 한다는 의미입니다.

Accounting is an essential management tool for analyzing the current state of a company and planning for its future.

So why is accounting so important, and how does it function as the company’s compass? Let’s take a closer look.

 

1. What is Accounting?

Accounting is more than just recording numbers and confirming financial status. It serves as an essential tool in managing a company, providing direction for its future. By delivering financial information, accounting enables us to grasp the current situation and chart a course forward. For this reason, accounting information is indispensable for decision-making.

2. Why is Accounting a Compass?

Just as a compass guides a traveler in the right direction, accounting plays an essential role in a company’s decision-making process.

Accounting doesn’t simply record past data; it analyzes financial status to provide management with a foundation for future choices. Through financial statements and reports, accounting clearly reveals the company's financial status, helping management make informed decisions. Additionally, analyzing cash flows helps determine funding needs or identify inefficiencies in cost structures, both of which are crucial in supporting these decisions.

The ultimate goal of accounting is to prepare the company for the future. By diagnosing the current situation based on financial information and establishing strategies to address it, accounting fulfills its core purpose. More than mere numbers, accounting enables companies to lay out a clear future plan.

3. The Key Functions of Accounting

Accounting encompasses a range of functions, including financial closing, preparing financial statements, tax reporting, and budget management. These tasks do more than simply report data; they provide essential information to diagnose the company’s health and develop future strategies.

In particular, financial statements transparently show the company’s assets, liabilities, income, and expenses. This allows management to clearly understand the company’s financial status and evaluate sustainability. Financial statements are akin to the company’s health checkup, showing precisely how resources are being used.

In conclusion, accounting is not merely about recording numbers; it is a core tool for diagnosing the present and planning for the future. Without accounting, it’s difficult for a company to set a clear direction, and critical management decisions could waver.

As the company’s compass, accounting plays the role of a guide, helping the company stay on the right path. Successful management becomes possible depending on how you view and use accounting.

 

Wishing you success in your job search, career transition, and professional life!