The World of Management: Accounting - Research Paper Example

Task: The World of Management: Accounting Introduction Accounting is the computation of a company’s transactions in a methodical manner in which the accountant must incorporate the Generally Accepted Accounting Standards (GAAP’s). Accountancy involves the analysis and recording of the business and fiscal endeavors of the company. Historical Overview According to Walker (238), in the nineteenth century many businesses did not need financial statements because corporations were in minimal numbers and most businesses were personal ventures. As the industrialization age was taking form and the railroads required expansion, as well as the corporations penetrate into new markets, appropriate reporting procedures were necessary. The increase of corporations did present demand for additional financial information that will enable the successful undertaking of the business financial activities. The study of accounting and “book keeping” became significantly relevant in numerous learning institutions (Walker 246). The financial undertakings of the businesses had to be carefully evaluated to assist in the verification of imperative decisions. The soaring growth of the corporations necessitated the employment of accountants to enlighten the executive on the financial situation of the firm. According to Whye (165), in 1881, there was the formation of the American Association of Public Accountants (AAPA). This institution was to establish the mannerisms to portray in the undertaking of the accounting profession. In America, the American Institute of Certified Public Accountants (AIPCA) was established (Whye 166). The ethical structures that would manage the accounting field were established in 1907. This became the guideline of the associations of the accountant to the employer and fellow workmates. This effort led to the formation of Association of Chartered Certified Accountants (ACCA), which would formulate accounting principles, and ethical architecture of accounting. Future job prospects Accounting is evolving everyday and the accounting principles are subject to various alterations that will be significant to the existing market. According to Jones (361), this will assist in delivery of comprehensive financial documents to the corporation explaining their economic standing and the financial resources viable for exploitation. This enables the management to amplify the firm’s earnings through diversification of their interests. The accounting occupation is evolving into various specialized units since the responsibilities of the accountants are advancing. Forensic accounting is one of the noteworthy progresses of the accounting occupation. Ideally, this accounting involves the investigative analysis of the financial documents of company’s to establish any inconsistencies in the financial records (Walker 242). Forensic accountants exhaustively review the financial documents of the business on the request of the company and strive to identify fraudulent dealings of the firm. The forensic accountants will use elaborate techniques, for example, the authenticity of source documents to view the amounts recorded. The knowledge of the forensic team, which is investigative accounting, will ensure the identification of the sensitive areas of the business. This accounting analyzes and gives counsel to the corporation on the appropriate technique to effect systems and discouraging. Such mode of accounting has been adopted in several countries to mitigate the trend of corporations to fabricate records. Therefore, forensic accounting is revolutionizing the essence of accountancy in establishing the activities of a company. According to Jones (366), this will enhance the accomplishments of the accounting fraternity. Related jobs Accounting functions are existent in numerous professions since knowledge of financial statements is well appreciated in many institutions. According to (Jones 362), one of the key jobs that are relative to accounting is Auditing. This comprises of the examination of company’s accounts to establish whether they present a true value of the dealings of the company. Auditing is an advanced form of accounting where independent persons other than the corporation’s employees are to substantiate the corporation’s financial records (Jones 365).Auditing is done at the conclusion of the financial year of a specific corporation. The auditors majorly rely on the evidence of the bookkeeping records that the accountant presents to them. The International Financial Reporting Standards (IFRS) regulate both occupations of accounting and auditing. According to Jones (366), these standards govern the presentation of financial statements by institutions. These standards are a benchmark that the accounting system of a country and compare to existent economic trends. Another occupation that relates to accounting is project management, which entails the decisiveness of a manager to ascertain the appropriate methods to disseminate the resources of a business. This occupation is similar to accounting since the project manager determines how to undertake adequately an assignment while utilizing the cost-benefit methodology. The project manager will evaluate the capacity of the business to finance the new investment similar to how an accountant disburses funds base on assessment of the firm’s capacity. The project managers have to create a financial documentation of the expense of the project. This will assist the management of the organization to budget appropriately. This is similar to how accounting addresses concerns of the financial dealings. In addition, Risk assessment is inclusive of the jobs that are similar to accounting. Risk assessment involves the evaluation of the hazards and opportunities of the business environment. The risk manager has to calculate potential benefits of the business if it embarks on a specific investment (Whye 169). This is reflective of the situation of an accountant in the assessment of the liquidity of a firm and advises the necessary departments on the capacities of the firm to accommodate their endeavors (Walker 244). This review stipulates several occupations incorporate similar concepts that are existent in the accounting profession. Finally, the occupation of a Financial Analyst resembles the accounting since it entails determination of financial procedures that will benefit the institution. The financial analyst examines the economic position of the firm and compares it with the existing economic trend. Thereafter, he formulates strategies and advises the company on the economic policies to adopt to improve their business. His analysis is necessitated by assessment of the financial documents. Evidently, the financial analyst assesses similar economic situations as the accountant. Licensing According to Jones (365), in order to acquire recognition as a full accountant, the paramount accounting institutions in the respective countries award the expectant scholars with certificates. The student should conclude all the segments of the accounting study and pass satisfactorily (Whye 178). Acquisition of this certificate will ensure the student appropriately comprehends the accounting environment and can decipher accounting problems. For example, auditors are qualified accountants who are recognized by the regulatory accounting bodies in their independent analysis. According to Jones (358) auditors, apply the accounting principles in creating the final accounts of the organization. This certificate ensures an individual can partake in consultancy services and further to specialize in the accounting faculty. This certificate is given to individuals to authenticate the qualification in being competent persons who are capable of performing accounting functions. According to Whye (172), many corporations require validations of the accountant’s expertise in the respective occupation and the license will enhance management’s confidence in the individual’s capabilities. Acquisition of the certificate will be testament that an individual has completed all the studies relative to accounting. This will instigate self-gratification since he will perceive the certificate as an accomplishment (Whye 174). However, non-completion of the accounting course is not implying restriction on an individual from practicing accounting. Completion of a proportion of accounting courses can warrant one to undertake accounting functions but not of a sophisticated nature. Therefore, the individual will be able to exploit his accounting expertise but his responsibilities will be limited in comparison to a full accountant. Summary According to Walker (248), the evolution of accounting is influenced by the increasing demand of quality statements by the corporations. Indeed with the modernization of the business environment elaborate methods had to be instigated to accommodate all the dealings of the business. Walker further insinuates the significance of other financial statements that in earlier years were insignificant became imperative accounting (Walker 236). Discipline was necessary to warrant fair representation of the financial documents of the corporation (Walker 238). The American and British professionals were instrumental in the advancement of accounting and wrote numerous journals on the topic. Walker acknowledges the theses contributions of Edwards and Matthews as having influence on the economic undertakings of Britain (Walker 245). Accounting was of enormous benefit to the railway revolution since the proprietors of this venture were able to evaluate their performance and establish their expenditure on the construction. In addition, banks that were financing the railways utilized the bookkeeping aspect of accounting to verify the disbursement of finances to the governments and proprietors (Walker 246). Whye elaborates on the growth of the Accounting field in America and the experiences of the businesses. He talks of the formation of American Association of Public Accountants (AAPA) which was replaced thereafter by the American Institute of Certified Public Accountants (AICPA) in 1887 (Whye 166). The accounting study was gradually becoming relevant to the American populace. Generally, Whye summarizes the evolution of accounting in the United States and relevance of accounting to contemporary issues. Jones highlights the significance of accounting to the current world. He suggests the accounting was imperative to the advancement of corporations. Contributions to accounting hare phenomenal in the analysis of financial documents. The continuous review of accounting standards is to apply relevant strategies and incorporate existing situations in the accounting profession. Works Cited Jones, Michael. The role of change agents and imitation in the diffusion of an idea: charge and discharge accounting. Accounting & Business Research. 38.5 (2008): 355-371. Van Wyhe, Glenn. A History of U.S. Higher Education in Accounting, Part I: Situating Accounting within the Academy. Issues in Accounting Education. 22. 2 (2007): 165-181 Walker, Stephen. Accounting in history. Accounting Historians Journal. 32.2 (2005): 233-259. Read More