What Is an Accounting Practice?
An accounting practice is a routine manner in which the day-to-day financial activities of a business entity are gathered and recorded. A firm's accounting practice refers to the method by which its accounting policies are implemented and adhered to on a routine basis, typically by an accountant, auditor, or a team of accounting professionals.
Accounting Practices Explained
An accounting practice is intended to enforce a firm's accounting guidelines and policies. It exists as the daily recording of financial data that is important to the evaluation and monitoring of the firm's economic activities. Accounting practice refers to the normal, practical application of accounting or auditing policies that occurs within a business.
On a deeper level, to remain competitive while adhering to certain standards of business conduct, accounting practices will implement accounting systems. These systems help gather, store and process financial and accounting data that is used by decision makers throughout an organization.
As physical and digital worlds have grown ever integrated, accounting information systems are now generally computer-based methods for tracking accounting activities which complement other enterprise-wide technologies and information management resources.
Accounting practices and attached systems produce financial reports can be used internally by management or externally by other stakeholders including investors, creditors and tax authorities. Accounting information systems, when paired with accounting practices, are designed to support all accounting functions and activities including auditing, financial accounting and reporting, management accounting and tax.
Although less noticeable but still a potent element, an accounting practice’s culture often sets individual standards, behaviors, and attitudes. These ways of doing business can manifest into good and bad norms in aggregate, which can lead to so-called accounting scandals at their worst. High profiles scandals include Enron in 2001; Sunbeam, WorldCom, and Tyco in 2002; and Toshiba in 2015.