One of the main questions regarding accounting in public discussion are the purpose of accounting principles and their use for society. So why do we need accounts and why does the society rely on accounting since medieval times? Frankly spoken society needs accountants since they are necessary for businesses to grow and flourish. Accountants help to solve adverse selection and moral hazard issues resulting from imperfect information within the company and with external parties which could result in a lower profitability of the business operations and a lower efficiency in the capital accumulation cycle. So one can argue that accounting is the backbone of the business financial world. The major functions of accounting and their use for society can be divided into two broad categories, which will be discussed in the following paragraphs. The first accounting category, which is often referred to as financial accounting, is comprised of information that companies intend to make available to the general public to attract new capital investments and to support the business operations. Stockholders, creditors, customers, suppliers, and regulatory authorities need detailed information while dealing with a company. The business provides them with the required relevant information via annual reports and financial statements to reduce the information asymmetries which could result in worse creditor and stockholder relations and which could prevent individuals to invest in the company.Secondly managerial accounting builds a separated accounting category which deals with information such as salary costs, cost of goods produced or profit targets that is not made public. Managerial accounting supplies the company department and division executives with useful knowledge which helps them to make better decision about the daily business operations and to accurately measure performance