The purpose and scope of accounting in complex operating environments
1. Scope of accounting in complex operating environments
Financial accounting is a subset of business accounting. Financial accounting's scope is to reflect all forms of assets, asset formation sources, economic and financial activities, and legal economic connections that arise throughout an organisation. However, it simply represents the aims in generic form for the purpose of preparing financial accounts. When structuring accounting work in businesses, it must be based on the features of production and business operations, as well as the needs of management, in order to clearly identify the particular scope of financial accounting and to clearly delineate between financial accounting.
- Financial Accounting (FA)
This means the collection, processing, examination, analysis and provision of economic and financial information by means of financial statements to the subjects who need to use the information of an accounting unit. The task of financial accounting is to monitor, observe, calculate and reflect the situation of assets, capital sources as well as business situation and results of the entity in order to serve the users of inside information and outside the entity, but mainly external entities (Investors, Tax Authorities, Financial Agencies, Banks, Statistical Offices...)
Financial accounting provides information about events that occur, so it must have high accuracy and reliability. On the other hand, this information should be collected on the basis of documents and actual evidence and financial statements should be prepared in accordance with the provisions of accounting standards and relevant legal documents.
- Management Accounting (MA)
Management Accounting is the collection, processing, analysis and provision of economic and financial information according to management requirements and economic and financial decisions within the company. The task of management accounting is through financial accounting data, processing and providing information about the process of formation, cost generation, asset management the situation in planning, control and decision making.
Management accounting has the basic feature of not only reflecting past events but also reflecting current and future events. The information provided by management accounting is associated with functional parts operating in the unit, so management accounting has high flexibility and adaptability.
2. Purpose of accounting in complex operating environments
Provide information to help managers in the process of planning, organizing, implementing, checking, controlling, evaluating and making decisions related to the mobilization and use of resources for activities. unit movement.
+ Economy (saving) is minimizing the cost of mobilizing resources to achieve the goal but still ensuring the output quality.
+ Efficiency is achieved when the same input resources produce the most output (maximum principle); or minimize the input resources provided to produce outputs of fixed quantity and quality (minimum principle).
As such, effectiveness is aimed at improving operations or reducing costs or increasing productivity, and it is often measured by comparing productivity with desired targets, goals or standards wait.
+ The efficiency of the management apparatus is the ability to manage and operate an organization including competent staff and ethical responsibilities in the process of operation, reflected in work performance, the performance of each department and the whole organization. That is, their activities are economical, efficient and effective
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