Why Are Ethics So Important In The Field Of Accounting
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Based on what you know about accounting, what role do
you see it playing in business operations? How dependent do you think a
business is on its accounting department? Why?
I think that accounting plays a very large role in
business operations because it is needed to show the financial status of that
business. It is also necessary to know what the status is in order to be able
to make important decisions involving expenses and money transactions. I think
that a business is extremely dependant on its accounting department for these
reasons. The accounting department could almost be considered the back bone of
a business in terms of the company's financial success. Without reliable
financial reporting a business could incur losses, possibly get audited and
possibly even cause a business to go bankrupt.
WEEK 1 DQ 2
Why are ethics so important in the field of
accounting?
Accounting ethics are important because a business
relies on the reported financial status to make its business decisions. A
business must have accurate reports and know that the business has sufficient
funds to continue to operate and be able to pay rent and other bills, pay employees,
and to continue producing products and/or offering services. Accountants have
acces to inside information and assets that could be detrimental to a business
should it enter into the wrong hands. A business needs to be able to rely on
competent and ethical professionals with confidence that the finances are being
accurately handled and reported.sample
of a student's work
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WEEK 3 DQ 1
When reviewing a financial report, why should
information be reliable, relevant, consistent, and comparable? In other words,
why are these accounting characteristics important? What kinds of problems
could be created if a financial report is not reliable, relevant, consistent,
or comparable?
Information in a financial report needs to be
reliable, relevant, consistent, and comparable because many people rely heavily
on this information in order to make important business decisions. The report
is useless to stockholders, managers, employees, and creditors if the
information is not accurate and able to give them the information that they
need to make certain business, lending, buying and/or selling decisions. The
information must be relevant in order to make a difference in the decisions
people make regarding the company and its future. The information should be verifiable
so that users know it can be relied on. It needs to be comparable so that
different companies can compare performance. The reports should be consistent
so that a company can easily refer back to the information if needed in the
future.
If the information is not reliable, users could make
wrong decisions based on inaccurate information and could potentially lose a
lot of money doing so. If the report is not relevant, users will not have the
information needed to make important business decisions. If the report is not
consistent, a company may have a hard time tracking financial results to
compare with other years.
WEEK 3 DQ 2
How does information from financial reports influence
business decisions? Why is it important for business managers to understand the
information found on financial reports?
Information from financial reports can influence
business decisions by offering its user a prediction of what the business'
future may look like based on how the company has done in the past. If these
reports show that the company has done well over the last two periods, then
decisions can be made based on the projections that the company may continue to
do well in the next period. For example, and investor may see this information
and decide to put money into the company because he/she believes that the
company will continue to make profits as it has been doing recently. A creditor
may decide to lend money to expand the company because it see in the reports
that the company has been doing well and should be able to repay the debt.
Managers need to be able to understand the information on financial reports
because they need to make important business decisions for the future the
company based on the company's expenditures, production, and profits or losses.
WEEK 5 DQ 1
How would you describe the difference between
financial and managerial accounting? What are the distinguishing features of
managerial accounting?
The main difference between financial and managerial
accounting is that managerial accounting is for internal users such as officers
and managers. Financial accounting, on the other hand, is for the needs of
external users such as stockholders, creditors, and regulators. Though each
field of accounting deals with the economic events of a
business, managerial accounting is done with the
purpose for making specific decisions in regards to the company.
The distinguishing features of managerial accounting
are that internal reports are produced as often as needed, they are very
detailed, and there are no independent audits done on these reports.
WEEK 5 DQ 2
Select a management function (planning, directing and
motivating, or controlling) and explain how that function relates to business
as a whole. Next, select a different function listed by a classmate. Discuss
with your classmate how the functions you each selected complement each
other.
Directing and motivating is a management function that
is important in any business. It is essential to any company to make sure that
all business operations are running smoothly. This involves implementing
planned objectives and providing necessary incentives for employees as well as
selecting executives, appointing managers and supervisors, and hiring and
training employees. I worked at Circuit City for four years and I can share now
from experience just how important motivating employees is and how badly a
company can suffer without proper motivation and incentives. This is something
that this company really lacked on (at least the one I worked at did) and now
it has gone out of business. I am sure that there were many other reasons
involved for why it went out of business, but I never felt in my fours years
there that me or any other employee was ever really motivated by management and
there was really no extra incentives to being a good worker. The company had an
very high turn around rate for employees and managers and they were never
trained well. I pretty much had to figure everything out on my own when I first
started working there. I had probably about seven different managers in those
four years and some I don't think ever even knew my name!
WEEK 7 DQ 1
You know how important it is to create budgets for
your household. How does budgeting help management make good business
decisions?
Budgeting can help management make good business
decisions that will help them to maintain enough cash to pay the company's
creditors, to have sufficient
raw materials to meet production requirements, and to
have adequate finished goods to meet expected sales. Budgeting is important for
management to be able to plan ahead and to be able to help the company to reach
its financial goals. Good budgeting also provides and early warning system for
any potential problems so that action can be taken beforehand. Budgeting also
helps management make good decisions because they are likely to be more
motivated to reach goals if the company's objectives are laid out before them.
WEEK 7 DQ 2
What are some of the different types of budgets?
Describe in detail one type of budget covered in the text. Describe what the
budget is used for and what information it provides a business. Then, as you
respond to your classmates, discuss how the budget you described relates to the
budget they described. Discuss how a business benefits from each of the budgets.
Some of the different types of budgets are the sales
budget, production budget, direct materials budget, and the direct labor
budget. The sales budget is the first budget that is prepared and is especially
important because each of the other budgets depends on it. The sales budget is
made from management’s best estimate of anticipated sales revenue for that
budget period. The sales budget can affect net income if the projections are
not accurate. This budget is relied heavily upon to determine how much inventory
is needed to meet the sale demands in the budget period. This budget shows the
expected unit sales volume and its anticipated unit price. These expected unit
sales volume and the anticipated unit price are multiplied together to
determine what the total sales budget will be for the year.
CAPSTONE DISCUSSION QUESTION
Think back over what you have studied and learned in
this course. Do you have a new perception of or appreciation for the field of
accounting and how it contributes to business? Explain.
I can honestly say that I have a new appreciation for
the field of accounting. I had no idea how important accounting was to a
business. Accurate accounting is important not only to the business as a whole,
but also to the managers, the investors and the creditors. Financial
statements, budgets and record keeping are far more complicating than I thought
they would be. A person could go on all day and still not cover every aspect of
accounting; profits and losses, assets and liabilities, partnerships and corporations,
contribution margins, and audits- just to name some. I also now see why
ethics are so important in accounting too. Good or bad ethics in accounting can
either make or break a company.
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