Tax Planning Methods and Accounting Practices - Essay Example

Accounting and Financial Reporting By: Student’s name: Course: Tutor: Institution Affiliation City: Date: Introduction Those in the accounting and finance fields are always required to give information about the institutions in which they professions. The failure of accountants to provide information that is up to the required standards means that the institution is going to face a lot of problems regarding its financial management. In the accounting principles, we have certain values that accounting/ financial statements are meant to have. The principles are very important as they guide the financial experts and accountants on how to handle various issues that may arise in the course of practicing. Accounting has specific ways that the statements and other financial statements should be. When it comes to doing reporting regarding finance and accounting, then the reports should rely on the accounting practices and rules that have been laid down. Uniformity that will lead to proper standards within the profession is going to ensure that reports produced to reflect the real picture of the financial level within the institution. Accounting/ Financial reports are very necessary, as they are the major basis of decision taking within the organization. They can indicate whether the institution is doing well financially and be able even to suggest the course of action that is to be taken to ensure that decisions are taken to ensure the prosperity of the institution. In this paper, I’m going to look into various functions of accounting and financial reporting in any organization. Tax Planning purpose. In their daily practice, accountants are the ones who will understand better which taxation measures that will be beneficial to the institution. Taxation forms an important part of an organization as it directly affects the performs of the institution. The accounting reporting will be important in ensuring that the right taxation method and approximation of the right amount of the tax that is to be paid by a given institution. When it comes to making decisions, there are some tax benefits that an organization can get if it knows the way to make its investments. Tax benefits are important to any organization, and it is important for them to base on the reports that are produced by the accounting department. If the accounting principles fail to apply when preparing the reports, then it is possible that the accountants are going to make mistakes, which at the end may harm the institutions. Various jurisdictions in the world have different laws regarding tax. It is important that the accounting department puts into practice what the laws stipulates so as to avoid the conflicts. Tax management is one of the roles of the accounting department. The practice ensures property management within the organization is carried in the right way hence leading to utilization of profitability from the tax. It is the financial reporting that makes the basis of all this management, and if well observed then it means that management of tax within the organization is going to be at its best. In the long run, well management of tax is going to ensure benefit to the institution as a whole (Charles, 2007, pg.19) Internal Reorganization Involving in Accounts When doing reports, it is possible to recognize the various weaknesses that are there within the organization. Recognition of the weaknesses may result in the reorganization of the way accounts activities are done. The accounting department is a very important sector in any organization it requires frequent changes that are going to ensure that its operation is up to date. To ensure that standard and clear records during reports are being produced then it will require that the accounts department gets to employ employees who have the competence to ensure all these reports are done in the right manner. It may be prudent to bring in those individuals who are acquainted with the new accounting technology that will enable the organization to produce its reports on time. To do this also then it is also recommended that the accounting systems should always update to ensure that the technology that is being used is going to be the best. Also, it is possible that the basis for various accounting estimates is done within the organization are going to change from time to time to fit the prevailing economic conditions in the organization. Various accounting bodies have identified this and indicate that when the accounting basis are changed within the organization, then it is a must that reason is given as to why a given method was forgone and the other being put in place. Therefore in financial reporting then it is possible that we see various changes within the organization to fit the prevailing conditions within the organization (Charles, 2008, pg. 22). Un-supplied Tax Services According to IFRS, the rules regarding tax are restricted to the territory in which the company resides. Then it is the role of each and every institution to ensure that tax on its profits is paid. Internationally this is a recognized practice, and each accounting department uses its reports to limit the taxes. When remitting the taxes, it is possible that some of the taxes may not be remitted at the end year and be forwarded in the subsequent periods. This means that this taxes must be indicated in the reports for them to be incurred and be included in the remittances according to the rules that are required. It is prudent for the accounting department in its reports to ensure that it provides for such taxes so as to avoid confusion and to ensure clarity of the statements that are produced. This is going to ensure that the financial reports are going to be more accurate and more inclusive (Charles, 2007, pg. 25). General Accounting Services The financial reporting documents are the ones that are used to determine the scope of the accounting department. The general services are the ones that give the scope that the accountants should be performing. The services that are performing the functions of the department that are usually reflected in the financial statements as those doing the different functions are going write different reports from the departments. General services done in quality will ensure that quality reports are done hence ensuring financial reporting (Damen, 2007). Auditing Auditing is a function that is meant to ensure that the reports produced are genuine, and they do not have any mistakes in them. Also, when performing the auditing function is performed all frauds that may be occurring within the organization may be detected hence leading to clear very free and statements. When performing functions in different departments, those individuals may from time to time omit or commit some errors. Some might be intentional that are meant to benefit those who are doing all this. The accounting department through audits is possible to know which area has tampered with hence rectify and also hold those who are responsible for intentional errors responsible. When the audit department is at the position, to detect frauds and rectify them before advancing then it means that the organization is going to produce quality reports that are going to be acceptable to all. Auditing is a very important function when it comes to reporting of financial information. The accounting department should have checks and balances that are going to ensure that accurate information is reported. Auditors should be keen in dealing with the information (Boer, 2008, pg. 9-10) Conclusion Financial reporting is one of the functions that should be given keen interest. Those who are involved in preparing these statements should be individuals who are keen and responsible in the way they handle the matter. The principles that have been set out by various financial bodies should be observed to ensure the standards that are expected to be met in the production of these reports. Reports are essential in taking decisions in the firm. They can indicate where the firm is not performing well and even suggest the course of action to rectify the trend. Financial reporting should frequently be done to indicate the position of the firm both financially and the profitability of the firm. To ensure that profitability is increased then it means that those factors that are considered when taking decisions that affect the accounting sectors should be experts who understand the methods that are going to benefit the firm most. Accounting practices are different, and the basis of each and every practice depend on the status of the firm financially, business being undertaken, the investments the firm has undertaken, the prevailing economic condition in the jurisdiction of the firm and also, the type of investors who own that particular firm. The different bodies that govern the accounting sector in that particular country are very important when it comes to all decisions that are taken. The international standard also is important when doing reporting of finance hence it is prudent to observe these rules closely. The management should give support to the accounting department if they want their statements to gain good reputation within the different stakeholders in the firm. The auditing and the tax department should be lead with individuals who have a deep understanding of the industry as a whole. The clear and accurate financial reports in a firm indicate that also, good decision-making practices are going to be implemented within the firm. Reference Boer-Sorbán, K., (2008). Agent-Based Simulation of Financial Markets: A modular, Continuous-Time Approach, Promotor. Cinnamon L & Larsen K, (2006). Accounting and Auditing Charles Jared & Jones Kyan, (2007). Tax planning methods and accounting practices Damen, F.J.A., (2007). Taking the Lead: The Role of Affect in Leadership Effectiveness. Dijksterhuis, M., (2003). 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