The purpose of accounting is to report much needed financial information about the performance of a company for a specific period. The information, which is reported on financial statements, will be used by stake holders and top management of the company for various reasons. There are two types of accounting. One is managerial accounting and the second one is financial accounting. The managerial accounting will be used by the companies to comprehend the financial performance of the company. Managerial accounting helps top management in taking informed decisions. Financial accounting has to follow various rules and regulations of GAAP while preparing the financial statements, which will help stakeholders to comprehended the financial position of a company.
Accountants will prepare majorly 3 types of reports on quarterly basis, half yearly basis and yearly basis. Thee statements are Balance Sheet, Cash Flow Statement and Income Statement, which is also called as profit & loss statement. Unless these 3 reports are prepared as per the rules of GAAP, the purpose of accounting will not be served. So, in a nutshell, accounting is a process of gathering financial information of a company in a specific period of time and presenting the same in a financial statement as per the rules of GAAP.
[...] Following the legal procedures and maintain a clean image so that all the stakeholders get benefited from the organization. Unfortunately, several companies will not follow the corporate governance while conducting the business and end up in bankruptcy or a scam. If a company follows the corporate governance rules and regulations, it will, definitely, reap great benefits in the long run. Depends on the level of confidence that is associated with the company, we can understand the corporate governance of a company. [...]
[...] An accountant will hold entire financial information of the company. He also knows from where the money is coming and where the funds are going. In a nutshell, he knows the cash flows of the company. An accountant should keep any information of the company confidential. If we consider an example, we can understand how important to have a trustworthy accountant. Let us say, an organization, which employs around 100 people, is in doldrums. Accountant will know the financial situation of the company for sure. [...]
[...] Technology not only brings benefits but also risks. Yes, the arrival of new technology always gives room to wide range of disadvantages in terms of data protection. Reference Ball R. (2006). International Financial Reporting Standards (IFRS): pros and cons for investors. Accounting and Business Research Farrar. J. H (1999). A brief History of Corporate Governance. [...]
[...] If an accountant is not trustworthy, it will affect the company badly. Impact of technology on the accounting profession Technology has impacted all major departments in the organization in recent times. Not only accounting but also other departments have changed their way of working by utilizing the latest technology. An accountant can not imagine a working environment without a computer and an accounting software package. Unlike olden days, where accountants had used wide range of machines for calculations and book keeping, today's accountant will use either accounting software or spreadsheets to complete get the work done. [...]
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