This information gather is viewed through use of the four financial statements that are made available by accounting departments. The income statement, retained earnings statement, balance sheet and the statement of cash flows are the four financial statements available for users. Each statement is supported by each other and each statement is independent of each other as well. The financial statements have their own purpose but when each statement is available it tells the financial story of a company and shows that accounting is very important and necessary in today’s
More than likely she felt that her friends and family were entitled to money from the government. A majority of fraudulent activity is not prosecuted. Managers are not willing to risk the possibilities of of bad press. This could lead to future attacks after weaknesses in company systems are revealed. Law officials are more concentrated with crimes that involve violence.
Internal users that use the financial statements would be accounting personnel, departments heads, corporate auditors, business unit leaders, and top management. These financial statements provide specific and varying data to all the internal users. For the accounting personnel, the objective is to prepare and present any accurate and complete data according to the norms. Department heads and leaders bring different perspectives to financial issues by undergoing accounting reports. Internal auditors, these accounting reports light on the tools a company uses to comply with all the rules.
Two main groups of users of financial information are internal and external users. Internal users are individuals who help operate the business within an organization such as managers, employees, supervisors, directors, etc. Upper management frequently makes planning and controlling decisions based on the financial information gathered. External users are those individuals and institutions that want financial information about specific organizations. For example, external users such as investors, creditors, and bankers receive this financial information by reading the reports and determine if a specific company is worth investing
Recording also will classify and summarize economic events. The bookkeeping function is included in the recording of economic events. Accounting reports are then communicated to interested internal and external users by means of financial statements. Internal interested users are individuals inside the company who plan, organize and run the business. These users can be comprised of finance directors, marketing managers, human resources, or management.
For instance in the business, there is an accountant and finance department, within that department people are organized into categories such as: accounts receivables, payables, costs, financial analyst, and an accountant analysis. Administrative and clerical also have their own department
The accounting statements were capital spending schedules, which differed in spending amounts (Mintz & Morris, "Case 2-1 Cynthia Cooper and WorldCom," 2011). When audit personnel, Cynthia Cooper, required an explanation for the difference in the capital spending schedules; finance directors explained it as “prepaid capacity”, but had no knowledge of what “prepaid capacity” meant (Mintz & Morris, "Case 2-1 Cynthia Cooper and WorldCom," 2011). The case from here became even more tainted with dishonest practices and explanations. Cynthia Cooper and Glyn Smith meet with numerous WorldCom directors, executives, and external partners to gained a more in depth understanding of the situation; but continued to receive the run around. There were some WorldCom directors who made entries, but didn’t know what they were for and GAAP support (Mintz & Morris, "Case 2-1 Cynthia Cooper and WorldCom," 2011).
Moreover the importance of profits to any business is that they need money to pay rents, insuranceand wages if the business makes no profit and more loss they may lose the shop because they cannot pay the rent. Also Shafal has six workers in her business so this means if Shafal doesn’t give the employees’ wages they may leave her business as well as take her to court. Most business has aims and objectives which are to make a profit so if any business doesn’t make profit they have not succeeded in their mission. Also importance of profit for a business
Article Analysis University of Phoenix ACC291 Taking a look at whether or not companies are acting ethical because they have integrity or because they have to follow the laws set forth by the Sarbanes-Oxley Act of 2002 is something all investors should do before they invest. Companies do not always act ethically because they want to be open and honest with their customers, employees, or investors, some do it simply because they have to in order to abide by the laws, rules, and regulations, and then just barely. While reading “Eight Years After The Fact Is SOX Working? A Look At The Brooke Corporation” one can notice several things wrong and ways that could lead to unethical practices and behaviors in accounting. For instance the company founder Robert Orr held several roles in management for the parent company as well as finance officer and other key positions that could open the door to unethical behaviors (Hazels, 2010).
Alumina, Inc. paid out money to a plaintiff based upon threat of lawsuit and hurting its public image (UoP, SIMULATIONS: Business Regulation Simulation, 2009). The issue started with neglect on their part, but with the public accounting of the issue, Mrs. Bates was able to draw her own conclusions to the situation and create a connection (at least minimally) to hers. This type of action can be very costly to the company, and the plan and the team will work to keep this type of action from