Accounting and finance plays a crucial role in the modern era which is also observed to be strongly business centric. As accepted by majority of the experts, accounting and finance have been into operations since ages. …
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Accounting and finance plays a crucial role in the modern era which is also observed to be strongly business centric. As accepted by majority of the experts, accounting and finance have been into operations since ages. As accepted by majority of the experts, accounting and finance have been into operations since ages. With a continuous development of the mankind and human civilisation the implication of accounting and its importance also have changed to a considerable amount. As stated by Elliott & Elliott (2007), “Accountants are communicators. Accountancy is the art of communicating financial information about a business entity to users such as shareholders and managers.” This statement provides a brief reflection of the role played by accountants and the implication of accountancy in the modern day phenomenon. Hereby, the paper intends to critically evaluate the statement with due consideration to the modern day perspective of accountancy. The discussion of the paper will initially aim at analysing the role of accountancy in the 21st century and later proceed with the intention to evaluate the similarities and dissimilarities between two major facets of modern accountancy, i.e. financial accounting and management accounting. The major users of these accounting methods will also be considered in the paper. Furthermore, it will aim at identifying the implications of these accounting standards. Conclusively, the paper will produce a comprehensive reflection of the learning outcomes from the paper. 2. Critical Discussion of the Statement It is of no doubt that accounting plays a central role in maintaining records of the financial transactions of businesses. It is often referred to as a process that encompasses a series of actions from collecting financial data on a regular basis to communicating the information to its users through financial statements. Thus, it emerges as a complex and broad concept to be defined concisely (Banerjee, 2010). Moreover, it was also observed that accounting had a vital influence on the strategic decisions of the businesses which provided the concept with a managerial definition of a communicator. Emphasised on these characteristics of modern day accounting, experts have intended to categorise the concept in two parts, i.e. financial accounting and management accounting (Tyagi & Tyagi, 2003). Financial accounting is considered to be the pathway of gathering financial information and analysing the effects of such information on the managerial decisions of the business unit. As stated by Albrecht & Et. Al. (2007), financial accounting is particularly “concerned with reporting financial information to interested external parties”. In this regard, the accounting process emphasises on maintaining records of the financial transactions. It further concentrates on the analysis of the obtained information with the aim to assist the management in decision-making. The accounting process also tends to identify various strengths as well as weaknesses possessed by the business units in financial terms. Through the implication of the accounting process, accountants concentrate on communicating the information with the assistance of variou9733436912s financial statements, such as balance sheets, cash-flow statements, annual income statements and others (Jagels & Ralston, 2006). Similarly, the concept of management accounting is referred to as the process to inform the management of a business regarding the financial status of the company. In a broader perspective, the accounting process intends to analyse the financial information strategically with the aim to relate the financial strengths along with weaknesses of the company with its strategic decisions. Notably, the decision can be related to the investment of working capital, future expansion of the product line or market area, mergers and acquisitions or even solvency (Albrecht & Et. Al., 2007). According to various professionals, management accoun
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On the contrary, there are some countries in which international accounting standards are considered as an appropriate means for carrying out financial reporting. This difference in their financial reporting is based on varying prejudices and preconceived concerns, the basis of which has often been questioned by experts and proponents of adopting national and international accounting standards.
all exception the control testing stage)" (n.d., para 1.).
With this, it can be summarized that the analytical procedures aim at having a deeper and more substantiated understanding of the client's business, through examining the consistency and validity of the business entity's account balances, transaction details and financial statements.
Like water, this rising tide of data can be viewed as an abundant, vital and necessary resource. With enough preparation, we should be able to tap into that reservoir -- and ride the wave -- by utilizing new ways to channel raw data into meaningful information.
Different accounting policies can provide different estimates of earnings therefore accounting profit is not only an arbitrary figure but also subjective in nature. Accounting income can also be misleading because of the fact that it can distort the figures like Earnings per share (EPS) due to its subjectivity.
s being asked to compare the difference between computing overhead based on direct labor hours( 150% of 4,000 direct labour hours = 6,000 hours) and computing overhead using direct labor hours (6,500)
Davina has scrutinized the current full cost or absorption costing method in
l market within a country or a regional market, a company operating on the international arena, often referred to as a multinational corporation is one which is involved in the production or the delivering of services in more than a single country. As such, international
Besides this the records must be kept in a way that it facilitates the process of decision-making by the top management. Marginal Costing and Absorption Costing are the two different techniques of recording the costs associated with the
For instance a purely domestic company and a multinational company are guided by the same set of goals. The financial managers of both the types of companies try to hasten the process of collecting receivables and lag the payments to
Generally, two types of capital are available i.e. owned capital and loaned capital. For public sector companies, capital structure includes various types of capital like equity, debt, preference, long term and short term
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