Our course focuses on the two main objectives of internal accounting procedures. The two objectives, in no particular order, are decision making and control. “Information about firms’ future costs and revenues is not readily available but must be estimated by managers. Organizations must obtain and disseminate the knowledge to make these decisions. (Zimmerman, 2009, p. 2) At the same time employees’ interests are rarely aligned with those of management. While we would like to think our staff finds great satisfaction in helping us meet our goals the reality is that their objectives are not always our own. Therefore, “all successful firms must devise mechanisms that help align employee interests with maximizing the organization’s value.” (Zimmerman, p. 3)
In some ways I am quite lucky in that I have many examples of internal accounting procedures and their inherent benefits because of my working environment. I am in the gaming industry, or more specifically the casino industry. Cost controls are extremely important to our specific business model. We have a great deal of amenities that are designed to entice customers towards our main product; gaming. If we don’t have an accurate analysis of what these enticements are actually costing us, we can easily over invest in our customers and come out in the end losing money. Subsequently we closely track our individuals’ personal contribution to our bottom line and reward them accordingly. For instance if a player is known to come into our establishment and spend an average of $800 we know that translates into roughly $80 of profit. If we spend $100 in incentives such as complimentary drinks or meals we’re going to be negative in the en...
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...al scenario, but unfortunately it was exactly what happened to close friend of mine. His folks are now back to work in their late 60’s, at a time when they thought they would be enjoying their life and living their dream. You simply cannot make accurate business decisions without a competent internal accounting procedure in place.
(2009). American Italian Pasta Company Reports Fiscal Year 2009 Results. CNNMoney.com. Retrieved from money.cnn.com/news.../056278.htm
Heher, A. M. (2009, November 12, 2009). Food fight: Burger King Franchisees sue chain over $1 burger promotion. USA Today, p. 1.
Morris, C. (2009). Electronics Fly off Shelves - but that might be bad news. CNBC.com. Retrieved from http://www/cnbc.com/id/34260938
Zimmerman, J. L. (2009). Accounting for decision making and control (Sixth Edition ed.). New York: McGraw-Hill Irwin.
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