accounting essay help

accounting essay help

The Importance of Accounting in Business

1. Introduction

The accounting frequently is seen by the entrepreneurs as a fiscal obligation and in some cases as a police authority. Some also improperly see the accounting as something that generates expenses, and ends up not having the expected results. This ends up creating in many people an extreme fatigue in the accounting matter, and when receiving the monthly expenses ask themselves: what am I doing with the accounting of my company. But after all, what is accounting? It is an instrument useful for the management and measurement of the costs and profits of your company. Accounting is one of the indispensable procedures for any business, and a useful tool for the management of organizations. Regardless of the objectives, size or legal nature of the company, accounting must be integrated into the context of that company, placing itself at the service of the affirmation of the company’s equity.

Over time, the business world has become more and more complex to handle, demanding that companies and entrepreneurs take some measures that will help adapt their companies to this new reality. Most medium or large companies have processes for managing their companies, but these processes need to be constantly evolving and sometimes being renovated as market demands evolve. The existence and the good functioning of the enterprise processes will generate a series of information that together will form another very important process that will assist the company’s management: the accounting. The accounting is a very important process, and it is its result that will inform the entrepreneur, solidity and profitability of his company.

2. Role of Accounting in Business Decision Making

Accounting is the only measurement and communication system that simultaneously measures and communicates comprehensive, economic, historical, and prospective empirical evidence on each society’s industry and firm. In business, the ultimate goal of every profit-seeking business manager is to take decisions that maximize the current wealth of stockholders. Managers are expected to choose strategies requiring their employees and agents to contribute personal effort to achieve the entity’s objectives. Accounting provides both managers and stakeholders with métiers that often involve shaping and evaluating business, as well as investment decisions and preparing accounting reports that aid and stimulate investor decision-making, collective, and ethical updating of society’s stock of knowledge. A manager must understand that it pays to consult with her human resource department or the accounting department before deciding which investment or business decisions should be made. As a result, accounting is a necessity to managers and stakeholders’ decision-making.

Accounting is paramount to the efficient and successful operation of any business. Without proper and efficient accounting, a business is likely to crumble and fail. The reasons for studying accounting are manifold and provide business people with a clear understanding of their business’s financial operations. This paper focuses on the role of accounting in business decision making. Success in business is almost always viewed as a result of good investment or management decisions. Such decisions must make close and accurate use of both financial and non-financial information. Indeed, management, rendering the decision, must use all available information with the utmost discretion. In any event, accounting must always play a role in the decision-making process.

3. Benefits of Accurate Financial Reporting

Therefore, the subject of research shown is the place and the role of accounting and the financial reporting system as a tool for partnership between the partners in the framework of its activities to ensure successful competition. In business, information is passed using innovative technologies using the accounting and financial reporting system as an information flow. This is done in a way that is established by law for market participants and in a competitive market economy. In compliance with the established requirements, it becomes feasible to meet the national accounting requirements and the requirements for financial reporting set by the public authorities with the interested parties. Non-compliance with these requirements leads to a distortion of the true exchange of information attained through financial reporting and fosters inequality between the potential cooperation partners.

To effectively maintain competition in the market, an economy uses investment criteria that are identical to those occurring within business enterprises: financial analysis. Through the process of analyzing financial reports, business executives gain valuable new knowledge, insight, and understanding of the main functions and mechanisms of their business. This can be linked with the statement of the Joint Economy Committee, that accounting is an information system for communication and assisting cooperation in the processes of resource allocation. The system of accounting and financial reports should create prerequisites for fruitful cooperation.

4. Ethical Considerations in Accounting

Ethics is about the protection of the principles, rules, and virtues that guide the behavior of accountants in financial matters and in the preparation of financial statements. Ethical and unethical behavior can manifest in an accountant’s activities and activities, the quality of financial reports and statements, the type of results accounting experts provide, and accounting conduct and supervision and regulation implementation. In recent years, ethical standards associated with financial reporting and the consequences of financial statements have attracted attention worldwide. Major ethical violations include colleagues’ failures, alleged fraud, and concerns expressed about a lack of transparency and accuracy in financial reports. Because ethics is important in all areas of accountancy, it is very likely to become an important issue. As a result, inventory accountants, professionals, directors, and management will need to be involved in good ethical thinking and ethical decision-making.

Because businesses and those who manage their accounting systems hold an enormous amount of power, ethical considerations are critical in producing financial statements which are transparent, relevant, consistent, and comparable. Despite this, many accounting and finance professionals have allowed themselves to be lulled into a false sense of security by achieving successful strategies, achieving good financial results, minimal regulatory oversight, good rapport with investors, or use of specific accounting and business techniques. This is why it is more important than ever to rely on ethical principles to prepare reliable financial reporting and financial accounting statements. In particular, honesty and objectivity, integrity, freedom from conflicts of interest, and the ability to hide personal, professional, and organizational weaknesses are important values.

5. Conclusion

At present, accounting is one of the important areas in the economic life of the public trust and feeling safeguarding interests of partner businesses and company roles in local financial administrations, accounting information systems of institutions and businesses, and in accounting training. From current commercial practices, it can clearly be seen that accounting development progress also partly influenced the training of a qualified accounting staff. For these reasons, over the years, accounting has grown steadily with the maturity level of capital. If there is a method that is the business language, that method is the accounting package. Accounting is an integral part of a business, as the accounting system of a company never stands still, it continuously evolves with the development of society, and when the company makes strategic decisions and develops operationally, all of them are reflected through the financial accounting of the company.

In conclusion, accounting has become very important in all businesses due to its scale and technological development, which has caused economic transactions to face a very complex situation. Due to the increase in the activity of the companies, the number of economic transactions that are recorded is also very high, and therefore the accounting aspect is very complex. It can be difficult to use accounting to summarize the occurrence of economic transactions. Today, all businesses are required to keep accounts regularly from month to month, at the end of the year to summarize the whole year. At the end of the year, financial statements must be prepared that clearly communicate the specific information that users need.