Over the centuries, accounting has remained confined to the financial recordkeeping function of accountancy. But today rapidly changing business environment has forced the accountants to reassess their roles and functions both within the organisation and the society. the role of an accountant is now shifted from that of a mere recorder of transactions to that of the member providing relevant information to the decision making team broadly accounting today is much more than just a bookkeeping and the preparation of financial reports accountant is now capable working in exciting new growth areas such as forensic accounting e-commerce (designing web-based payment system); financial planning, environmental accounting, etc. This realisation came due to the fact that accounting is capable of providing the kind of information that managers and other interested persons need in order to make better decisions. This aspect of accounting gradually assumed so much importance that it has now been raised to the level of an information system. As an information system, it collects data and communicates economic information about the organisation to a wide variety of users whose decisions and actions are related to its performance. In 1941, The American Institute of Certified Public Accountants (AICPA) had defined accounting as the art of recording, classifying, and summarising in a significant manner and in terms of money, transactions and events which are, in part at least, of financial character, and interpreting the results thereof’. With greater economic development resulting in changing role of accounting, its scope, became broader. In 1966, the American Accounting Association (AAA) defined accounting as ‘the process of identifying, measuring and communicating economic information to permit informed judgments and decisions by users of information.Business organisations involves economic events. An economic event is known as a happening of consequence to a business organisation which consists of transactions and which are measurable in monetary terms. For example, purchase of machinery, installing and keeping it ready for manufacturing is an event which comprises number of financial transactions such as buying a machine, transportation of machine, site preparation for installation of a machine, expenditure incurred on its installation and trial runs. Thus, accounting identifies bunch of transactions relating to an economic event. If an event involves transactions between an outsider and an organisation, these are known as external events. The following are the examples of such transactions: Sale of Reebok shoes to the customers.Rendering services to the customers by Videocon Limited.Purchase of materials from suppliers.Payment of monthly rent to the landlord.An internal event is an economic event that occurs entirely between the internal wings of an enterprise, e.g., supply of raw material or components by the store’s department to the manufacturing department, payment of wages to the employees, etc.Identification means determining what transactions to record, i.e., to identify events that are to be recorded. It involves observing activities and selecting those events that are of a considered financial character and relate to the organization. The business transactions and other economic events, therefore, are evaluated for deciding whether it has to be recorded in books of account. For example, the value of human resources, changes in managerial policies or appointment of personnel are important but none of these are recorded in books of account. However, when a company makes a sale or purchase, whether on cash or credit or pays a salary it is recorded in the books of account. Measurement: It means quantification (including estimates) of business transactions into financial terms by using monetary unit, viz. rupees and paise as a measuring unit. If an event cannot be quantified in monetary terms, it is not considered for recording in financial accounts. That is why important items like the appointment of a new managing director, signing of contracts or changes in personnel are not shown in the books of accounts. Recording: Once the economic events are identified and measured in financial terms, these are recorded in books of account in monetary terms and chronological order. A recording is done in a manner that the necessary financial information is summarised as per well-established practice and is made available as and when required.Communication means The economic events are identified, measured and recorded so that the pertinent information is generated and communicated in a certain form to management and other internal and external users. The information is regularly communicated through accounting reports. These reports provide information that is useful to a variety of users who have an interest in assessing the financial performance and the position of an enterprise, planning and controlling business activities and making necessary decisions from time to time. The accounting information system should be designed in such a way that the right information is communicated to the right person at the right time. Reports can be daily, weekly, monthly, or quarterly, depending upon the needs of the users. An important element in the communication process is the accountant’s ability and efficiency in presenting the relevant information.Organisation refers to a business enterprise, whether for profit or not-forprofit motive. Depending upon the size of activities and level of business operation, it can be a sole-proprietory concern, partnership firm, cooperative society, company, local authority, municipal corporation or any other association of persons.Accounting is a means by which necessary financial information about business enterprise is com and is also called the language of business. Many users need financial information to make important decisions. These users can be divided into two broad categories: internal users and external users. Internal users include Chief Executive, Financial Officer, Vice President, Business Unit Managers, Plant Managers, Store Managers, Line Supervisors, etc. External users include present and potential investors (shareholders), Creditors (Banks and other Financial Institutions, Debentureholders and other Lenders), Tax Authorities, Regulatory Agencies (Department of Company Affairs, Registrar of Companies, Securities Exchange Board of India, Labour Unions, Trade Associations, Stock Exchange and Customers, etc. Since the primary function of accounting is to provide useful information for decision-making, it is a means to an end, with the end being the decision that is helped by the availability of accounting information