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Edwards, John J. Hampton, Wood and Sangster have shown the role of accounting and finance in controlling resources of a business, where business will account for what it owns and owes. That is goods purchased and expanses prepaid or accruals. In addition to this financial decisions will be made such as: the impact on current assets in deciding the creditor limit and current liabilities when deciding on payments of debts.
Also Michael Jones portrays the effect of costing in planning for expansion or cutting down expenses of businesses. The author has shown a significant role of accounting and finance in the rise of businesses. Moreover, he has shown how cost can be allocated and that effective planning through budgeting can help business flourish. Also, managers can use the above information to decide day to day decisions of a business.
On the other side, the author Eddie McLaney still doubts whether accounting and finance without ethics can play a great role to the business world. This is due to the rise of different scandals such as Enron, where much of accounting and financial information was misleading.
Analysis and findings
This section will look on the importance of finance and accounting for businesses that were looked at in the Literature Review. Also it will argue the ethics of accounting and finance in business due to current accounting scandals. Businesses need accounting information in order to make knowledgeable decisions. Creditors and other lenders want to make sure that they will be paid back for the credit that they have given to a business as suggested by Wood and Sangster(2012, p.9). These decisions done by financial professionals have to administer and determine credit policy, make capital budgeting decisions and advise on debts and preferred stock to enhance profitability as portrayed by Harold Bierman (2010, p. 3). Therefore, financial reports are important for making financial decisions for business. In addition accounting and finance are important during this time of uncertainty such as slow growth in the economy, debt and crisis. Thus financial information will seek to stabilise current growth and future state of the business. As suggested by the President of European Commission, Jose Manuel Barroso, on the current euro zone debt crisis that, banks should set aside more assets to help safeguard against future losses. Thus accounting and finance have to play a significant role in the rising of new capital to improve confidence that they could cope with any losses on problem loans. Therefore in times of economic turbulence accounting and finance would help businesses stability. In addition, accounting and finance are essential for the growth and expansion of the business. An author Michael Jones has suggested that financial information can reflect either growth or can influence a decision on the expansion of a business. The author has explained the impact of cost allocation in departments and long-term planning on businesses in order to show the state of a business. Hence through costing, planning and control and decision making on the basis of financial information business would grow and expand. Likewise, accounting and finance will control and monitor business resources such as assets. Accountants and financial personal participate in making decisions that will affect the current and future utilization of business resources as portrayed by J. Hampton (1983, p.17). Also the author says that, business goals can be achieved by mix of composition of resources. Whereby managers have to determine ways to use resources effectively and reduce waste and unneeded expenses through financial reports. This will lead to …show more content…
Moreover, a further research on accounting standards can be made to ensure that businesses are assisted by the standards.
References and bibliography:
Text
Alexander, D., & Nobes, C. (2010). Financial accounting: an international introduction. (4th Ed.). Harlow: Financial Times Prentice Hall 2010.
Bierman, H. (2010). An introduction to accounting and managerial finance. Singapore ; Hackensack, NJ : World Scientific 2010.
Hampton, J. J. (1983). Financial decision making. (3rd Ed.). Reston, Va: Reston Publishing Company 1983.
Jones, M. (2006). Management accounting. Chichester: Wiley 2006
Kolb, W.R., & Rodriguez J.R. (1992) Principles of finance (2nd Ed.), Lexington: D.C. Heath and Company
McLaney, E. (2011). Business finance theory and practice. (9th Ed.). Harlow, England: Financial Times/Prentice Hall 2011.
Wood, F., & Sangster, A. (2008). Business accounting 1 UK GAAP (1st Ed.). Essex: Pearson Education
Also Michael Jones portrays the effect of costing in planning for expansion or cutting down expenses of businesses. The author has shown a significant role of accounting and finance in the rise of businesses. Moreover, he has shown how cost can be allocated and that effective planning through budgeting can help business flourish. Also, managers can use the above information to decide day to day decisions of a business.
On the other side, the author Eddie McLaney still doubts whether accounting and finance without ethics can play a great role to the business world. This is due to the rise of different scandals such as Enron, where much of accounting and financial information was misleading.
Analysis and findings
This section will look on the importance of finance and accounting for businesses that were looked at in the Literature Review. Also it will argue the ethics of accounting and finance in business due to current accounting scandals. Businesses need accounting information in order to make knowledgeable decisions. Creditors and other lenders want to make sure that they will be paid back for the credit that they have given to a business as suggested by Wood and Sangster(2012, p.9). These decisions done by financial professionals have to administer and determine credit policy, make capital budgeting decisions and advise on debts and preferred stock to enhance profitability as portrayed by Harold Bierman (2010, p. 3). Therefore, financial reports are important for making financial decisions for business. In addition accounting and finance are important during this time of uncertainty such as slow growth in the economy, debt and crisis. Thus financial information will seek to stabilise current growth and future state of the business. As suggested by the President of European Commission, Jose Manuel Barroso, on the current euro zone debt crisis that, banks should set aside more assets to help safeguard against future losses. Thus accounting and finance have to play a significant role in the rising of new capital to improve confidence that they could cope with any losses on problem loans. Therefore in times of economic turbulence accounting and finance would help businesses stability. In addition, accounting and finance are essential for the growth and expansion of the business. An author Michael Jones has suggested that financial information can reflect either growth or can influence a decision on the expansion of a business. The author has explained the impact of cost allocation in departments and long-term planning on businesses in order to show the state of a business. Hence through costing, planning and control and decision making on the basis of financial information business would grow and expand. Likewise, accounting and finance will control and monitor business resources such as assets. Accountants and financial personal participate in making decisions that will affect the current and future utilization of business resources as portrayed by J. Hampton (1983, p.17). Also the author says that, business goals can be achieved by mix of composition of resources. Whereby managers have to determine ways to use resources effectively and reduce waste and unneeded expenses through financial reports. This will lead to …show more content…
Moreover, a further research on accounting standards can be made to ensure that businesses are assisted by the standards.
References and bibliography:
Text
Alexander, D., & Nobes, C. (2010). Financial accounting: an international introduction. (4th Ed.). Harlow: Financial Times Prentice Hall 2010.
Bierman, H. (2010). An introduction to accounting and managerial finance. Singapore ; Hackensack, NJ : World Scientific 2010.
Hampton, J. J. (1983). Financial decision making. (3rd Ed.). Reston, Va: Reston Publishing Company 1983.
Jones, M. (2006). Management accounting. Chichester: Wiley 2006
Kolb, W.R., & Rodriguez J.R. (1992) Principles of finance (2nd Ed.), Lexington: D.C. Heath and Company
McLaney, E. (2011). Business finance theory and practice. (9th Ed.). Harlow, England: Financial Times/Prentice Hall 2011.
Wood, F., & Sangster, A. (2008). Business accounting 1 UK GAAP (1st Ed.). Essex: Pearson Education