The Importance of Accounting
Week 1 Discussion Question 1
The international accounting profession has lost its way and is no longer serving the needs of different users of accounting information in a manner which is appropriate and meaningful for the global business environment of today.
I respectfully disagree with the above statement.
If anything, the accounting profession and its importance in day to day management of businesses has increased in the past decades. The information provided by company financial snapshots is a vital tool in managing the day to day, monthly and yearly affairs of any business be it large or small. The information provided monthly by accountants aids both the financial controllers and management in assessing where and how well they’ve performed historically, and importantly aids in management decisions of where to focus resources and manpower for current or future needs. Cote (2002) states that “the fundamental purpose of accounting is to provide accurate, useful and timely financial information.”
The importance of accounting within every business should never be underestimated or disregarded. In every efficient hotel and business it is the system used to decide at what rate to sell a room, cost of sales or cost of goods sold (COS or COGS) are calculated giving insight into profits or losses within certain centers such as rooms, food and beverage cost, gift shop sales or tours.
There are many users of financial and accounting information within the business environment.
While the relevant information can be used throughout the business as a means of assessing departmental performance, mostly it useful for upper level management and how it is chosen to filter down can vary from organisation to organisation. When the accountants of an organisation prepare the information it is of great relevance to them to know exactly how this information will be processed and by whom. These different groups are known as user groups and these can consist of many
The international accounting profession has lost its way and is no longer serving the needs of different users of accounting information in a manner which is appropriate and meaningful for the global business environment of today.
I respectfully disagree with the above statement.
If anything, the accounting profession and its importance in day to day management of businesses has increased in the past decades. The information provided by company financial snapshots is a vital tool in managing the day to day, monthly and yearly affairs of any business be it large or small. The information provided monthly by accountants aids both the financial controllers and management in assessing where and how well they’ve performed historically, and importantly aids in management decisions of where to focus resources and manpower for current or future needs. Cote (2002) states that “the fundamental purpose of accounting is to provide accurate, useful and timely financial information.”
The importance of accounting within every business should never be underestimated or disregarded. In every efficient hotel and business it is the system used to decide at what rate to sell a room, cost of sales or cost of goods sold (COS or COGS) are calculated giving insight into profits or losses within certain centers such as rooms, food and beverage cost, gift shop sales or tours.
There are many users of financial and accounting information within the business environment.
While the relevant information can be used throughout the business as a means of assessing departmental performance, mostly it useful for upper level management and how it is chosen to filter down can vary from organisation to organisation. When the accountants of an organisation prepare the information it is of great relevance to them to know exactly how this information will be processed and by whom. These different groups are known as user groups and these can consist of many
References: 1. Cote, Raymond - Basic Hotel and Restaurant Accounting - 2002 Chapter 1 pages 3 to 29 2. Hald, Tim - Published May 31st 2010 Article titled - Accounting Ethics - The Importance of Ethical Practices in Business and Personal Finance available ONLINE at http://ezinearticles.com/?Accounting-Ethics---The-Importance-of-Ethical-Practices-in-Business-and-Personal-Finance&id=4376913 Accessed 10 July 2011 3. Thomas, Cathy Booth - Published June 18th 2002 Article titled - Called to Account - available ONLINE at http://www.time.com/time/business/article/0,8599,263006,00.Accessed 10 July 2011 4. University of Liverpool - Lecture Notes - Managing Resources 5. University of Liverpool - Managing Resources Third Edition - Pearson 6.http://www.marketwatch.com/story/government-of-belize-expropriates-fortis-ownership-of-belize-electricity-limited-bel-2011-06-21 ONLINE PRESS RELEASE June 21st 2011 accessed 20 July 2011 7. The Economist - 30 June 2011 Article available ONLINE entitled “Telecoms in Belize - Back to the drawing boards - The courts overturn a controversial nationalisation” http://www.economist.com/node/18898155 Accessed 20 July 2011