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ASSIGNMENT FRONT SHEET1

Qualification BTEC Level 4 HND Diploma in BusinessUnit number and title Unit 5: Accounting Principles (5038)

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I. INTRODUCTION.

Thank you for visiting our blog!

First and foremost, we would like to express our gratitude for your time. Now let’s provide anintroduction to our business. Our accounting firm offers business advice to our clients. We have anoffice located in the city of London along with additional regional offices throughout the UK andone in Vietnam. As you may already know, accounting tasks are essential for all types ofbusinesses regardless of size, industry, or structure. Depending on how companies manage theirfinances they can. Employ their accountants or seek external assistance. Accounting plays a role inassisting managers and CFOs with aspects such as cash flow management, asset evaluation, riskassessment, expense allocation, and revenue calculation. With this in mind, our goal is to provideyou with insights into the responsibilities of accountants both in general and within a context.Now let’s dive into the part of our blog!

II.THE ROLE OF ACCOUNTING IN AN ORGANIZATION.

2.1. Definition of accounting and the general role of accounting in an organization.2.1.1. Definition of accounting.

The process of recording a company's financial activity is accounting, according to Fernando(2022). Additionally, accounting mandates that these transactions be summed up, evaluated, andreported to supervisory authorities, regulators, and tax authorities. An accounting financialstatement describes a company's operations, financial standing, and cash flow throughout anaccounting period. In addition, accounting is crucial to any business. For small businesses, it canbe handled by a bookkeeper or accountant, but for companies with hundreds of employees, it canbe handled by huge financial departments. In Fernando's view, data from different accountingstreams, like managerial and cost accounting, are crucial to helping management make good

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2.1.2. The general role of accounting in an organization.

According to Jim Woodruff (2018), The purpose of accounting is to provide financial informationto the stakeholders of the business: management, investors, and creditors. Measures are takento account for the activities carried out at a particular company, which is then shared withmanagement plus any other person involved in this process.

For managers to make any sensible decisions they require accurate and timely financial data,which is precisely what the accountants provide. The accounting process collects data andpresents it in the form of a report while the accountants assist in interpreting the meaning ofthese same reports to provide for the solvent of business questions.

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2.2. Different types of accounting and the main users of accounting information.2.2.1. Different types of accounting

Financial accounting

The primary concern of financial accounting is the preparation information for the financialreports, which is externally reported. Together with their colleagues and managers, financialaccounting plans on ways that will increase the profitability of the organization. Along with these,they monitor all book-related financial transactions and see whether internal procedures are beingfollowed or not and are all activities are recorded in relevant book-related financial statements. Managerial accounting

this form of accounting records, monitors, and assists in the financial management of a firm.However, most of their documentation is only meant for their internal stakeholders. However, amanagerial accountant should exercise caution while conversing about sensitive data and towhom. They collaborate with their managers to identify and develop a budget that meets theorganization’s short-term & long-term objectives. Managerial accountants deal with studying pastdata, to make future estimates.

Cost accounting

From this perspective, they can be attributed as being related to managerial accounting since theactions of cost accounting impact on financial and managerial accounting. Cost accountants arerequired to record, present, and examine production costs.

External auditing

External audit refers to the process whereby an entity presents its financial record to anindependent third party for further financial view. Here a third party is a credible source in telling

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p p y p y gwhether a company’s financial statement is by GAAP. Tax accounting

Yearly, tax accountants assist in keeping businesses on track with Internal Revenue Coderequirement when they file their tax documents. They may help companies plan for future taxreturns, e.g., by preventing specific tax burdens foreseeable tax decisions, or any other taximplications. Mostly, large organizations hire tax accountants to help them deal withcomplicated financial records.

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Accounting information systems

AIS is a system of collecting, storing, and processing the financial and accounting information of acompany. Today most AIS are designed to connect with different departments, for instanceconnecting the hiring process of HR to the payroll function of a newly hired employee.

Forensic Accounting

The investigation of financial records of individual or corporate entities through forensicaccounting. In some instances, it may dictate that accountants go back and recreate certainfinancial information for review because some information is unavailable. Forensic accountantsaim to obtain all documents, properly and completely accounting for all transactions in financialstatements. They often handle legal cases relating to disputes, fraud, and claims.

Public Accounting

The term ‘public accounting’ describes firms that provide accountancy advice depending onpublic demands. They may work in auditing, help out with tax returns, advise on specialprocedures relevant to the installation of technology or computer programmers, and provide legaladvice.

Governmental accounting

As such, governmental accountants are in charge of managing financial planning and theallocation of resources to departments within a local, state, or federal government. Standards forthis kind of accountancy must adhere to the guidelines of the Governmental Accounting StandardsBoard, which sets common accounting procedures for local and state governments.

2.2.2. The main users of accounting information.

In the business world, financial information serves two main groups of users: internal users and

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external users.

Internal users consist of management, employees, the board of directors, and shareholders withinthe organization. They utilize accounting information to make decisions and plan strategically.External users, including investors, creditors, regulators, customers, suppliers, and competitors,rely on accounting data to assess the financial well-being of the company and make significantdecisions. The primary objective of accounting information is to fulfill the informationrequirements of both these user groups, facilitating effective decision-making and ensuringtransparency.

2.2.3. Career opportunities in accounting.

There are numerous career opportunities in accounting, spread over a wide range of industriesand sectors. The image you provided shows a graphic of the various areas of accounting, which

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can be broadly categorized into two main groups: financial accounting and managementaccounting.

The process involves preparing and presenting financial statements that correctly represent thefinancial health and standing of a company. However, management accounting is directed atoffering internal financial data so that managers can make good business decisions.

Within these two main categories, there is a wide range of specific accounting jobs available,including:

General accounting: Day-to-day accounting tasks include the recording of transactions,preparation of financial statements, and management of accounts payable and receivable. Thesetasks are handled by general accountants.

Cost accounting: The cost accountants track and analyze the costs involved in producing goods orrendering services to customers.

Budget analysts work in the business and organizations’ budgets. Budgeting:

Internal auditing: Internal auditors are responsible for investigating the effectiveness andcompliance with regulatory frameworks of a company’s internal controls and financial reportingsystems.

Consulting: Consulting accountants offer advisory and aid to firms in matters like tax planning,strategy, and system establishment.

Tax accounting: Tax accountants make or prepare tax returns for individuals and companies. Forensic accounting: There are forensic accountants who are involved in investigations offinancial crimes and irregularities.

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Managerial accounting: Managerial accountants supply financial data and analysis necessary toguide the manager’s decision-making process.

There are also several accounting-related jobs in other areas like banking, finance, and humanresources alongside the particular accounting jobs.

The picture from you also shows some of the accounting careers that are available at the differentprofessional levels. For instance, in entry-level accounting jobs, the employee would be requiredto perform duties such as data entry or account reconciliation. However, accountants can rise tohigher positions whereby those with experience may become staff accountants, senioraccountants, and managers. The top positions are held by accounting professionals who may becontrollers or CFOs.

Due to the anticipated growth in this profession beyond the average rate, there should be amyriad of jobs available for accountants in this coming decade. Therefore, accountants with

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specialized skills such as tax accounting, forensic accounting, and information technologyaccounting may have high demand in the job market.

If you want to get ready for your accounting career, there is some advice you may need. To beginwith, one should get a Bachelor’s degree in accounting or any other relevant course. In addition,many accountants opt to obtain a professional qualification, for instance, the Certified PublicAccountant or CPA. It is also necessary to have practical experience, apart from formal educationand training. Internships or volunteering can provide great practical experience and networkingopportunities in the accounting industry.

2.2.4. Interrelationships of accounting function and other functions.

Evaluating relationships among the accounting function and other aspects of an entity iscritical in reconciling financial actions with wider goals. To succeed in any organization, some ofthe tasks carried out by the accounting function include financial record keeping, reporting, anddata analysis. But, for effective management, one needs to know how accounting interacts withother functions such as sales, production, and human resources, that is, how it contributes jointlytowards organizational objectives.

Accounting has to meet the needs of the organization including that it provides correctfinancial information, contributes to organizational operational need and gives to thecompany’s strategic requirement. Moreover, the accounting function must respond to therequirements of the stakeholders, which include investors, customers, and employees.Accounting information is what these groups use in making decisions and to measure their owncompany’s performance.

Secondly, accounting must contribute towards fulfilling social expectations. Hence entailsobserving the legal, moral, and societal responsibilities such as sustainability of theenvironment and right business practices. Conclusively, the integration of accounting with other

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organizational functions is crucial in realizing the company’s objectives, satisfying the needs ofstakeholders, and fulfilling societal obligations. It is a fundamental ingredient necessary for theoverall well-being of an organization.

2.2.5. Assess accounting's role with manager.

The importance of a critical analysis of accounting’s critical role in providing the essentialinformation for effective managerial decision-making during complexity such as the COVID-19pandemic can only enhance persuasiveness.

Accounting is the pivot upon which financial information is gathered, processed, andcommunicated in organizations. With growing uncertainties and complex market situations in linewith the current COVID-19 pandemic, there is an increased demand for accurate and real-timefinancial insights. These are invaluable insights that managers face when they find themselvesleading in shifting sands.

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It is essential to understand interactions between accounting and other functions of anorganization for successful business operations. Through various departments, like finance,operations, marketing, and more, accounting unifies an organization and helps it adapt to changesswiftly. Through the provision of reliable financial insights, accounting enables managers to makedata-guided decisions such as resource allocation, cost savings identification, and alignment withorganizational goals.

Additionally, accounting’s impact goes beyond an organization’s confines such as being part ofsocietal responsibilities like ethical business practices and conformity to regulatory requirements.Accounting plays a critical role as a tool that reveals how the organization meets its socialresponsibilities amidst complex situations like the COVID-19 pandemic. These include makingsocially responsible decisions and being involved in initiatives of public interest, including supportfor public health.

As such, accounting is persuasive in offering financial data that is timely, accurate, and relevant fordecision-making. This information assists in making managerial decisions, especially in difficultoperational conditions. The accounting process is of critical importance; it is integral to otherorganizational functions and has a role to play as a responsible member of society. Understandinghow important accounting is during periods of change helps us appreciate its value and place inmodern organizations.

2.2.6. Required skills and competence for accounting roles.

Accountants must ensure accountants must ensure their work is impeccable and precise becauseeven minor mistakes can translate into major problems.

Ability to work independently and as part of a team: Accountants have to work independently,as well as be able to collaborate effectively with others.

Good communication and interpersonal skills: To do this, they should communicate

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