IMPACT OF MORE ACCOUNTING INFORMATION Essay Example | Topics and Well Written Essays - 3000 words

IMPACT OF MORE ACCOUNTING INFORMATION - Essay Example The impact of more accounting information will be discussed in relation to the users of the financial statements such as the shareholders, suppliers, customers and creditors. Likewise, the impact of more accounting information when used by the competitors (Molloy and Molloy, 1996) or employees will also be discussed. Considerations of future situations tend to affect conventional accounting, although using elements of the future forms an essential component of the accounting structure. The financial standard of decision relevancy of accounting (Weston and Brigham, 1993), generally agreed to be a primary factor that gives societal value to accounting, may be weakened by the search for a more trustworthy accounting procedure. One of the best techniques in accounting would be to incorporate aspects of future values without leaving too many degrees of freedom for manipulating the data. The aim is thus to keep accounting credible, and yet predictable and even if more accounting informatio n becomes available, all aspects of the information will have to be considered, before any final conclusion is drawn on the advantages or disadvantages of the accounting information. ... The financial statements are audited by external auditors (Whittington and Pany, 1995) either chartered accountants or certified public accountants in order to give credibility to the statements. All companies are required to give financial statements to its shareholders, suppliers, creditors, employees, managers, board of directors, government regulating bodies and the like in order to ensure that the company does not violate any corporate laws and that they remain accountable to their stakeholders and financiers. The financial statements are important tools for decision making and determine company management policies and thus accounting forms the basis of any corporate management decision making. There have been arguments on incorporating additional estimates or forecasts of the future into financial statements and providing estimates of future cash flows. This may in turn be considered alongside some sensational corporate scandals, for companies located in the US, which have been focused on reducing the power of managers which could engage in fraudulent behavior and accounting manipulation of assets, liabilities and capital. A more reliable and validated or trustworthy figures on the balance sheet is expected and income statement accounts have been implemented by new and more complicated monitoring and inspection processes. As to how far this can be achieved can be studied by using market values in accounting reports. The Generally Accepted Accounting Principles (GAAPs) in a number of countries contain elements of the market values of assets and liabilities. To illustrate, International Accounting Standards (IAS), U.K., and U.S. GAAPs require financial investments that are not long-term investments,

Operations Management Forecasting Essay Example | Topics and Well Written Essays - 750 words

Operations Management Forecasting - Essay Example Throughout the past two decades more as well as more businessmen have learned the value of using financial forecasts in preparation the affairs of the companies which they administer. The increasing receipt of formal financial forecasts by management may be attributed to a wide diversity of causes. In the primary place, young men educated in the theory of trade and financial administrations have achieved positions of liability in many companies. Moreover, the excellent courses in industry administration and economics, given in American universities and colleges, have affected the decision-making techniques employed in modern venture. Men trained in these institutions have been tending to get hold of the most comprehensive facts obtainable concerning the factors which mainly determine the results of their production ventures. As a result, the operations of more trade have been subject to the influence of men who try to reduce the effect of chance as an issue determining success or failure. Probably the mainly significant single forecast used by the management of commerce is the sales forecast. A confidentially owned business exists to create and sell commodities at a profit in competition by means of other enterprises. It follows that the measure of goods to be produced and the price at which such merchandise will be sold are significant measures of the action of the venture and affect the scale of the profits obtained. As a result, practically all other forecasts used in planning the relationships of a trade enterprise depend on a sales forecast. This is true of approximation which may be made concerning prospect profits, modify in products, capability requirements, organization, bloodthirsty effort, capital necessities, inventories, etc. no doubt, these may be termed the "internal" forecasts, because these are approximation of the situations inside a single company which are completely or mainly convenient by the management. Forecasting in framework On the other hand, the sales forecast is based on additional forecasts concerning future financial conditions, likely efforts by competitors, political situations, modify in technology, cultural growth, etc. These approximations may be termed "external" forecasts, because the situations would exist even if the corporation concerned did not, and, so, they are outside to a company. Qualitative Forecasting Methods Forecasts consequence from ruling and supposition made by management. Actually a helpful forecast is the result of a huge number of judgments which have been made concerning many dissimilar matters. Because lots of the situations which will affect a forecast are not exactly determinable, the judgment of the forecaster often must be based on unfinished or