The US Commerce Department estimates there are about 626,000 people working in the accounting business. At the core of accounting practice is the maintenance of financial data files, analysis and interpretation of such data, and the preparation of reports based on this data. American companies often use both in-house and outsourced accountants to manage their financial data. An audit, which is a thorough examination of a corporation s financial affairs and conduct by accountants, serves as a core financial control in the business world. Companies typically commission independent audits once a year, and independent auditors are required to be outside the company in question.
Accounting practices are precise, but they often vary by industry.
For example, in some industries assets are measured based on what they cost in the past, as opposed to the current market value. Companies that deal in durable goods may use straight-line deprecation which writes down the value of an asset over an extended amount of time while nondurable goods manufacturers would most likely use the accelerated depreciation model. The SEC has statutory authority to dictate accounting and reporting standards for publicly held companies, but its policy has been to let the public sector largely regulate itself. Today, the so-called Big Five accounting firms dominate the business, with all other competitors far behind them in revenues. Accounting firms increasingly do more than just accounting.