Accounting has often been called the language of business because it provides information about business enterprises to managers and other employees, investors, creditors, regulators, and the public. These users of accounting information make decisions based on what they know about companies and other entities, including governmental units and not-for-profits.

Accounting is an ongoing process of identifying important information about a business or other entity, then measuring, recording, and maintaining the information in an accounting system. Periodically, this information is communicated to internal and external users in the form of reports and financial statements. This process is carried out in accordance with generally accepted principles, laws and regulations, and ethical standards.

Using this accounting information, individuals can answer questions like the following: How did this company perform this year? Should I invest in this company? Should I lend it money? Does this entity comply with laws and regulations? The answers to these questions are only as good as the accounting information on which they are based.