The definition of science includes attaining knowledge through study, practice, investigation, and careful observation. This includes having gained knowledge of general truths about the laws of operations, especially through tested means as in using the scientific method. Similarly, the definition of accounting includes observation, investigation, and identification through testing and collection methods to draw conclusions about the data. Extensive study and training are necessary before the professional is able to formulate a hypothesis in both science and accounting. For both the fields of science and accounting, the professional makes conclusions and judgments after careful investigation, documentation, and research. In accounting, the book entries are the accepted method of recording and classifying data in logical and permanent form.

Identify and Measure

A scientist will identify and research a topic, measure, and record results until everyone is satisfied with the accuracy of the data. In the same way, accountants identify and measure data. Accounting transactions are identified and recorded using a double-entry bookkeeping accounting system that includes a set of accounts. When an auditor is testing for accuracy of accounting practices, numerous tests and measurements are done until every one is satisfied that the results are accurate. Because the measurements in accounting involve subjective judgments by the accountant about business liabilities and asset values, the process is more like a scientific approach to data interpretation.


In order for accounting information to be usable by the receiver, it needs to be communicated in ways that are easily understandable and relevant to those receiving the information. Of course, these principles hold true with any scientific research. It must be relevant and understandable or it is useless. In accounting, the accepted methods of communicating financial data in an understandable and summarized format include preparing financial reports such as the general ledger, balance sheets, income statements, and cash flow statements. Accepted measurements are used to analyze the data that these forms contain and accountants study the formulas to interpret the data. Some examples are inventory turnover ratios, Debt-to-Equity Ratio, and Operating Margin. Reliance on the data collected and the analysis tools reduce the uncertainty in those who must make the decisions on how to proceed with the information.