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Relevance of accounting to society
An essay about the history of accounting
Relevance of accounting to society
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Accounting is the art of recording, summarizing, reporting and analyzing financial transactions. The organization wealth, profitability and liquidity are determined by accounting. Daily and long term decisions are done according to accounting, without accounting the company will have no basis to make decisions. Accounting is the most respected and oldest professions. It is a profession consisting of people having the knowledge and education to carry out the tasks of storing, sorting, retrieving, summarizing and presenting the information in various reports and analysis .Part of accounting emphasize on presenting the information in the form of financial statements such as: income statement, balance sheet, trial balance to be presented to people …show more content…
Useful information will lead to better decision by the user. This information must be reliable, relevant, accessible, verifiable, understandable and on timely manner. A system is set of interrelated components that interact together to achieve a specific goal. Information system is the collection of technical and human resources that consist of storage, distribution and communication for the information needed by the organization. It is the combination of software, hardware, infrastructure and trained employees (user) designed and organized to facilitate planning, control, coordination and decision making in an organization. The definition of information system shows that it includes three major components: inputs, processes and output. Input is the devices where data is entered into the accounting system to be processed. Data is transferred into information to be useful. Output is the meaningful and useful information which is provided by the system. Processes, data are processes using computers to produce useful and meaningful information. Other components include goals and objectives where every system is designed to achieve a goal or more. Data storage, data must be stored internally for processing in addition to the external data entered. Users are people who will use the information produced by the system and who use the system also. Finally instructions and procedures, data is …show more content…
We can start with the invention of abacus that was used to keep track of calculation of business. Although this was not technology, there were several attempts to build machines to help accountants with their mathematical calculations. The first machine was the invention of calculator for information accuracy. With every development in technology the speed and proficiency of accountants improve, but even this invention still had to keep track of business functions using paper entry. Identifying, measuring and communicating financial information processes was documented in paper terms, records, columns of numbers and hand written statements. The accounting profession began to take a new look towards the end of the twentieth century. Computers and accounting software has changed the industry completely. With computer programs such as Microsoft excel, electronic spreadsheet is found then. The job became easier and with less error. Accounting technology has allowed the accountant to find new challenges with much more to offer then before when relying on
According to Warren Buffett, accounting is the language of business. The main focus in accounting is dealing with financial records. The hours of being an accountant can take up a lot of time especially if it is a higher ranked job. An accountant can basically work anywhere at any time. An accountant is very important to the government. There are a lot of job availabilities when wanting to be an accountant. Accounting is important to society because if there were no accountants it would make life hard for people to file their taxes and accountants make sure that the taxes get to the right place.
Financial Accounting is ‘Asset valuation, accounting record completeness and accuracy, accounting estimates, reporting transparency, fair value accounting issues, convergence of accounting standards, evolution of accounting standards, audit efficiency and effectiveness’, as suggested by Accounting Dictionary (2014).
Information Management has to do with capturing information, efficient planning, organizing and evaluating the information to interpret for an organization to make well informed decisions. (Hinton, 2006) The main reason organizations depend on information is to improve its overall management in order to yield significant operational benefits in all areas of the organization and importantly its overall efficiency, competitiveness and responsiveness. The improvements either need expansion in the amount of information required or implementing a new information management system.(Power, 1983) The information management system is effective in organizations when the activities are shared amongst various groups, preparing them for change in the information system by identifying problems and evaluating it and gradually integrating actions in the project for successful implementation. (Bass, 1983), (Mintzberg, Rasinghami and Theoret 1976). Most organizations believe Information Technology and Information Management is the same but according to Hinton (2006), while Information Technology is an important role in an organization. Information Management is broader it helps the organization to build, maintain and re-build its business processes and information system.
Financial accounting is the analysis, classification, and recording of financial transactions and reporting such information to respective users especially external users who use the information to make decisions about their engagements with the entity. In financial accounting general purpose financial statements are used for external reporting. The public by standards imposes the development of the statements through respective national professional bodies, International Accounting Standards Board and respective company Acts for various nations.
A. What is accounting and how does it help you manage your personal finance? Accounting is defined by Merriam-Webster as the system of recording and summarizing business and financial transactions and analyzing, verifying, and reporting the results. In personal finance, accounting is an extremely important tool to assist in accurately assessing your current situation and understanding the necessary steps that needs to be taken to achieve financial goals. Cash accounting, a method of accounting that records cash flow transactions as they change hands, is the preferred accounting method when accounting is done for personal financial purposes. By practicing accounting in our financial planning we are able to determine if our income is able to meet our financial obligations.
Several accounting tools have helped accountants do their jobs and make them more efficient. These accounting tools spanned the time from before Luca Pacioli until the modern era of accounting began in the late 1970s. Some of these accounting tools are the abacus, slide rule, adding machine, and the calculator. The first calculator was the Asian abacus.
Accounting is the pillar of every company to measure its growth, loss, revenue , capital, its really specify the real terms in foam of figures and sometimes in tables, in accounting there are certain rules are obtained to make more accuracy while playing with figures.
Towards the end of the twentieth century the accounting profession began to take on a whole new look. Computers and accounting software has changed the industry completely. With programs such as Microsoft Excel an accountant now had an electronic spreadsheet. The need for adding machines, calculators, ledgers and pencils was eliminated. The job became less tedious with less of a margin for error. The core training for accountants which included the basic accounting, auditing and tax preparation was a thing of the past. With use of the computer an accountant can now perform statistical accounting or forecasting
At a glance, accounting might appear as a repetitive cycle of preparing and examining financial statements. However, a brief exposure to accounting has taught me how chaotic it can be for accountants. An accountant captures and represents the information of businesses. By reviewing financial operations, an accountant helps a business run efficiently. This profession can be intellectually stimulating and rewarding. After learning about accounting, I cannot help but be interested and desire to work toward a degree in accountancy. In my studies, I have learned accountants require a plethora of qualities to be successful. And to mature from a student to a professional, I must resolve to strengthen my weaknesses. There is much I must learn and achieve, but a degree in accounting is well worth the time spent.
Change is inevitable. Yogi Berra once said “The future ain’t what it used to be.” It is clear that the future of the accounting profession ain’t what it used to be (Gormon and Hargadon 1). The changes occurring are happening fast, they are dynamic and they are completely and undeniably real. Since the world around the accountant is changing, the accountant has no option but to change as well. The field of accounting has always been one to know change and to know adjustment, but within the recent past and certainly within the next few decades, the changes that are occurring and will occur absolutely are the most dramatic and exponential yet. Obvious changes lie in the expanding scope of services performed by accountants, the increased use of
Accounting aids the government and organisations in decision making for their financial stability. This numerical data helps solve real life problems and contributes to how the economy and businesses perform.
An accountant makes sure that the Nation’s firms are run efficiently, the public records are kept accurately, and that taxes are paid properly and on time (“Accountants and Auditors”). Accounting is the study of how a business tracks their income, assets, expenses, and many other things for a period of time. They also do many other things like quality management, tax strategy, and health care benefits management (“Welcome to Careers in Accounting”). An accountant is crucial to the success of a business, without one the business tends to fail.
Accounting is that the systematic method of recording, storing and presenting company money knowledge. Accountants maintain advanced records
Accounting is a very important term to our modern society. It is the career for men and women who at the start have their eyes set on top positions in industry, management, government, and general business. Accounting is a basic need of every businessman, from the operator of a filling station to the government of the United States. It's so important to our society. None of the business organization can operate without is. They are there-somewhere-in every business. In small business, people use pen, ink and skill keep the records. In large business, modern accounting machines are used to operate. Men and women are directing these machines in the accounting process. Wise businessmen enter business must have some accounting knowledge.
So in conclusion I hope by reading this you know have a better understanding accounting. Also I want you to have and understanding of how it was originated and the major contributors of the systems we use today in accounting.