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Accounting covers a broad and diverse area, which involves providing financial expertise to business, such as providing advice in decision making for future development and corporate growth, preparation and controlling activities, efficiency or effectiveness in conducting business operations measurement and gathering outside reporting requirements. Accountants are professionals that are in great demand in the business world. An accounting degree helps provide a person with a sound technical ability and broad understanding of the role of accounting in the business world.
Today's globalization has led to greater integration of the world's major financial markets and with it the widespread trading of complex new kinds of financial instruments. Businesses nowadays have resources that are more available at hand for financing their activities and managing financial risks than ever before, and financial research to improve our understanding of how markets work, how financial products should be priced, and how risks can be managed, has been developed at a speedy rate.
In terms of employment opportunities for accounts, the current market is already as good as any. With a strong economy and active capital markets, the market for accountants is always good, but layering on the ever more complex accounting rules, significant new audit requirements, and overlay the massive impact of Sarbanes Oxley and Bill 198 (Ring,T.).
There is an extraordinarily good market for accountants, particularly accounts with strong grounding. There are rewarding career opportunities for individuals with the knowledge and skills needed to understand the latest accounting concepts and applied them in business.
The significant changes in accounting standards today increased the demand for accounting practices and expertise. There is a significant need for accountants to help in the transitioning to the new rules. In today's accounting standards requires companies to:
Train all their finances and accounting personnel on the new standards, including international operations.
Provide the necessary information that accounting standards requires.
Renegotiate contracts that referenced reported accounting amounts, and
Expectations relative to managing market is the impact of the adoption of accounting standards on reported earning and other financial statement amounts (Ring, T.).
Imminent forces in the accounting profession are significant. Conceivably and understandably, the profession exerts pressure that an accounting education is appropriate training for entry into the accounting profession. It seems that the argument made that a dynamic academic discipline in accounting will serve the accounting profession. The accounting profession would have access to innovative thinking and creative ideas, which would be immediately relevant to professional problems.
There would perhaps be less emphasis on the teaching of rules and regulations, and more emphasis on scholarly independent thinking. There should be more emphasis on understanding general equilibrium effects, and understanding how optimal choices can be prepared. Note that there are other manifestations of vocational forces working against accounting achieving full academic citizenship (Ring, T). For instance:
Teaching accounting is being done, more and more, by people who do not have academic training and academic values;
Enrollment in traditional accounting PhD programs is declining, and at the same time there appears to be developing a new class of PhD programs;
There is an increased reliance on student evaluations, school rankings, and other non-academic measures to decide what is taught and by whom;
There is greater emphasis on short-term revenue measures for the evaluation of academic programs (Ring, T.).
WHAT IS ACCOUNTING
Definition for accounting is to perform and apply the knowledge that concerns mainly with (a) methods of recording transactions, (b) keeping financial records, (c) performing internal audits, (d) reporting and analyzing financial information to the management, and (e) advising on taxation matters. This methodical process of identifying, recording, measuring, classifying, verifying, summarizing, interpreting and communicating financial information can disclose profits or losses for a specified time. This process records the value and nature of the business assets, liabilities and the stockholders' equity, (business dictionary.com.)
Accounting provides the company with the necessary information on (a) availability of their resources, (b) the way to employ the means to finance those resources, and (c) to achieve the outcome through their use.
Two major purpose in accounting (a) to report and help businesses, non-profit organization, and persons that record transactions for the reason of preparing a presentation in the performance report that shows its present financial status; (b) to reflect the performance of the company and assist the assessment of the business income, cash flow and shareholder's equity, Minbiole, E. A. (1998). CliffsQuickReviewTM Accounting Principles I.: John Wiley and Sons.
FOUR BASIC TYPES OF FINANCIAL STATEMETS
Businesses depend on four basic financial statements. These financial statements are an important management tool. When they are correctly prepared and properly interpreted, they contribute an understanding of the current financial conditions, problems, and possibilities of a business. The preparation of the basic financial statements requires management to make estimates and assumptions that affects the reported amounts of assets and liabilities, as well as disclosures of contingent assets and liabilities from the date of the financial statement (Gill and Chatton).
The Balance Sheet
The Income Statement
The Cash Flow Statement, and
The Shareholder's Equity Statement.
The Balance Sheet:
We can define the balance sheet being a review of asset, liabilities and equity of a business entity, usually at end of the fiscal year. Comparing the balance sheet with other financial statements for changes in financial positions makes it more meaningful.
In the accounting, profession, the balance sheet is also known as, the financial position of a business entity. This statement would contain the assets being current as well as fixed, liabilities being current and long-term liabilities, and the stockholder's equity categorizes funds and sources of funds are disbursed. The balance sheet shows the net worth of the business entity by the business performance through their asset and liabilities (Minbiole, E.A.).
The Income Statement:
The income statement uses all the portions of the balance sheet and has an impact on the business entity for its financial year. The income statement that is also known as the earning or operation statement, it lists the revenue and expenses of the business entity. The income statement uses the depreciation and amortization expenses due to the depreciation of fixed asset of the business. In addition, the interest expenses on the long as well as short the income statement (Minbiole, E.A.).
The Cash Flow Statement
For any business entity, the cash flow statement uses the income statement, and balance sheet to find out the follow of cash for particular year. The cash flow includes the operating activities, cash flow from investing activities, and cash flow from financing activities. The cash from operating activity shows how the company has used/generated cash for/form its operation. The cash from investing activities reflects the cash outflow/inflow from purchase or sale of asset securities. The shareholder's equity sheet uses the balance sheet as well as income statement to show the current shareholder's position in the business (Alba, j., Bathija, M., & Thornton, M.).