Question B
Provision of information for planning
Planning, control, as well as decision making, are the basic keys that are needed for proper management of a company. In accounting, planning and control of the cost and operations are the vital part of the good management system. For developing plans for the expected functions of the company accounting control is important (Tamke, 2019). Operations of the company mainly carried out through the planning. Planning for accounting has to do as per the requirement of the company. The planning strategy should be appropriate so that it can fulfil the aims and the objectives of the company over a certain period. A company needs proper accounting planning because there are limited resources of accounting, and the resources are costly. The areas where the resources are available and where the company can make a profit by applying the strategies are diverse. All the levels require appropriate planning for the better outcome. Planning must occur at a high level of the setting system. After adopting a setting strategy, it is important to think about the optimum position that can maximize the potential of the company to achieve the goals of the company successfully.
It should be broad-based thought. Thoughtful consideration of the financial realities can be possible to get for adopting an appropriate planning strategy. Another important thing company must focus on when establishing planning. The planning strategy should be understandable to the employees working in that particular company. Share of the planning is also important for that specific issue. Clear communication is needed to make it successful. Appropriate planning must consist of the strategy, positioning and the budget. Developing a business strategy requires a considerable amount of time and a reasonable effort because an organization is mainly defined by the strategic planning that is adopted by the company. Strategic planning must fulfil the Core values of the company, mission, aims and objectives of the company. The sustainability of the company also depends on the strategic planning adopted by the company. Positioning is another important part of strategic planning (Archibugi, 2019). However, positioning is a broad concept, and it is mainly done by gathering as well as evaluating the information related to accounting. The manager of the company should understand the nature of the cost behaviour, what type of changes is needed for better profitability.
Even breakpoint calculations will be helpful in that particular issue. In-depth research about global trade and transfer is also important for that specific issue. Research is needed about the taxes, tariffs and shipping. As stated above, the budget is another necessary component of planning.
An appropriate account is required to outline the financial planning of an organization. The budgeting process of the company includes the ongoing operations, plans of capital expenditure, financing corporation (Garbatov et al. 2018). Information related to the anticipated revenues and expenses of an organization must be included in the strategic accounting plan. The process of budget operating mainly starts with the assessment of the anticipated sales. Financial budget, the capital budget also plays an important role in that particular issue.
Provision of information for controlling
Management must take appropriate steps to control the administration as per strategic planning. The major facilitator of a control process in accounting is the managerial accountant. Managerial accountants mainly establish alternative strategies to avoid unavoidable situations for enhancing the internal control and the accuracy of the financial reports mandatory certification is needed as per the per cent trend. A controller is always present in the organization to control all the operational management in the company. Controlling process of an organization mainly includes the monitoring process, reliability and certification process, scorecard process. An appropriate monitoring tool is required to monitor the internal operation of the organization (Kutsyk and Ostapyuk, 2017). A logical basis is also needed to manage the situation and to handle the unavoidable situations in the company or an organization. Standard development is also required to monitor the efficiency of the product and to control, and manage the cost and accountant related issues of the company. Standard mainly develops to assess the value of the labors, cost of the materials and also for the overall assessment of the facilities as well as the equipment of the company.
Variances also needed to manage the issues related to accounting. Developing warning signs to take appropriate actions for a particular situation is possible through the variances. The result of the analysis of the variance of the accountant helps the manager of the company to focus on the expectations. Exception management is another term that is used to define the process of concentrating on variances. Variance monitoring needs great care. Flexible tools are required to fulfil the needs as well as the demands of the customer (Zahid and Vagif, 2020). Development of the scoring system is another strategy that is taken by the managers of the company for a better monitoring system.
The main focus of the scorecard system is to evaluate the elements that are very important for an organization. An appropriate balance is needed to maintain the approaches of the scorecard. The goal of that particular issue is to focus on the performance components. Balanced scorecards need careful development as well as implementations. This is very beneficial to achieve the goals of the company (Costin, 2017). Quality management is another important task that must be controlled under the control of accounting. The aims, as well as the objectives of quality control management, are to focus on the administration regarding customer service. Problem-solving of the customers is another task of quality control management. Scientific methodology is used to manage the quality of the service. Reliability is another issue that must be focused under that particular point. Appropriate rules and regulations are needed to establish a proper system for controlling the accounting service (Isaі, 2017). Formal certification is also required to develop the policies. Legal actions can solve the problem in a certain period. Proper accreditation also helps to improve the satisfaction of the customer and also helps to improve the reliability of the consumers.
Provision of information for decision making
Accounting is a process followed within the organisation that helps the entity to provide basic knowledge regarding the financial position. Through accounting, the company knows its financial status and accordingly manages controls and takes decisions to improve its business operations. As opined by Birt et al. (2020), accounting is important in case of decision-making as it helps to provide the company with a basic overview of its financial business operations and accordingly this result to provide the company in taking effective financial decisions. It provides investors with a baseline about the company’s financial process and accordingly tends to provide resources. Thus this accounting aids in making effective decisions resulting in organisational development. Furthermore, accounting provides a data-driven look where improving the management process is noticed. As such, this accordingly resulted in showing the company major importance of accounting in making decisions. Decisions to improve the future business process and accordingly to manage the business operations are taken through accounting.
Furthermore, accounting is also important as it helps to evaluate the company cost analysis and provide future costs. As such decisions on developing the business cost account can be accordingly noticed as one such importance in accounting (Weygandt et al. 2020). However, accounting is also important in decision making as through the accounting process it aids to provide the company with knowing the investment growth. Hence the management takes decisions on improving the long term investment resulting in a positive, successful outcome. However, another importance of accounting is it provides the company to show the budget process that helps in knowing the expenses and profits. Hence effective decisions are taken to manage the business forecasting, and accordingly, this result in ascertaining positive outcomes. Effective financial plans and sales growth of entities are accordingly known through such application of accounting. Henceforth, accounting is important in making decisions on managing the business sales process and accordingly improving the activity process. Accounting provides a cost analysis process and hereby helps in making decisions regarding improve the business costs process resulting in positive business sustainability (Comandaru, 2019). Besides, accounting helps companies to make decisions on how to allocate scarce resources accordingly within the entity that resulted in a positive outcome.
Investment decisions are also the importance of accounting, whereby through accounting-related net profit and balance sheet of the company is known and helps to make decisions on investing. Thus investment in company shares is accordingly known through such a process of accounting as a major decision in results the business to achieve a positive outcome. As mentioned by (Hilorme et al. 2019), accounting is important to the company in lending decisions as through accounting, and it provides others with the company overview and liquidity position of the business. As a result, financial institutions through seeing the liquidity position make better lending decisions providing the company with short-term and long-term credits. It would further be noticed that accounting has another importance in decision making as it helps to provide the company with analyzing the tracking the liquid efficiency of the entity and accordingly results in ascertaining positive outcome. For example provides financial information to businesses that help to provide in making decision in adapting organisational development. Besides, accounting has other related importance in decision-making, whereby it provides a comparison in business solvency and credit worthiness of the company. As such growth of the company in both negative and positive ways can be noticed through accounting that helps managers of the company to make decisions in implementing better techniques or strategies to develop the business process in an effective way (Birt et al. 2020). Lastly, another importance of accounting in making decisions is addressing the business about the economic condition. Accordingly, decisions are taken to improve the economic growth of the entity.
c. Compliance requirements for accounting
Compliance requirement refers to guidelines or laws followed by the company on certain grounds. Accounting is important for compliance requirements as it helps to provide an effective record keeping process that results in a positive outcome. Hence accounting aids to record the journal books and thus results in developing the business process in an effective way. Managing the auditing books can be accordingly noticed as one such accounting importance in compliance requirements. As stated by Oosthuizen (2020), accounting is followed under certain rules and policy standards. As a result it is important in case of compliance requirements. Besides, it would further be noticed that policies and procedures are accordingly known as one such way of the accounting process in which related measurements are taken, resulting in positive outcomes. Through the process of accounting major importance of compliance requirement where it can be noticed that under Section (3A) to Section 211 as per Companies Amendment Act 1999, it requires every balance sheet and profit and loss account comply with all the accounting standards.
Through accounting, it provides the business in knowing the related rules in context to accounting as the importance for compliance requirements and accordingly, financial measures are taken. For example, accounting measures are accordingly followed, which accordingly ascertain in achieving a positive accounting process. Accounting laws and regulation are followed as compliance requirements to complete the accounting process that is known. In compliance, requirement accounting is important as it provides an overview of the corporate social responsibility of the company through achieving the related financial reports related to corporate. Henceforth such results show a positive outcome achieving the business to ascertain positive result and accordingly ascertain business growth (Weygandt et al. 2020). Enhancing financial disclosure is another importance of accounting in compliance requirements whereby reporting requirements of financial transactions are accordingly known through such a process. Besides, managing the stock transactions and balance sheet of the company are the other compliance requirement importance in accounting.
Disclosure of accounts and accordingly managing the additional auditing system are noticed as compliance requirements in accounting, providing effective results. Another accounting importance for compliance requirements is measuring the related cash flow transaction process by reviewing the accounts accordingly (Oosthuizen, 2020). Thus this results to show a positive outcome achieving business effectiveness resulting success. As per the standard related business cash flows are accordingly managed through the preparation of accounting, and this accordingly results in a positive outcome.
Reference list
Books
Journals
Comandaru, A.M., Paschia, L., Stanescu, S.G. and Coman, M.D., 2019. ACCOUNTING INFORMATION-NOTICE OF AN EFFICIENT DECISION SYSTEM. Hyperion Economic Journal, p.3.
Garbatov, Y., Sisci, F. and Ventura, M., 2018. Risk-based framework for ship and structural design accounting for maintenance planning. Ocean Engineering, 166, pp.12-25.
Isaі, O.V., 2017. Accounting information and decision making. pp.84-98
Kutsyk, P. and Ostapyuk, N., 2017. Organization of operational and strategic controlling in integrated accounting system. Technology audit and production reserves, 3(4 (35)), pp.24-29.
Tamke, W., 2019. ACCT 215-001: Managerial Accounting. pp.123-134
