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Relationship between accounting, accountability and organizational control - Essay Example

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Masters
Author : aydenhamill
Essay
Finance & Accounting
Pages 7 (1757 words)

Summary

Accounting is a business language mostly used in the world of business to describe all transactions entered into by an enterprise hence it is used by individuals associated with business. These people include managers, investors, bankers and lawyers…

Extract of sample
Relationship between accounting, accountability and organizational control

These people include managers, investors, bankers and lawyers. Since it is a business language, there are words and terms that are used to mean one thing but different in ordinary language usage influencing a person to survey the transactions and also get an insight of how business activities are transacted. The process of record making is called book keeping. Accounting is more than book keeping, and is concerned on how these records are put, the analysis of the records and also interpretation. An accountant is concerned with the relationship between the financial results and the events that have led to them. They do study various alternatives that are available to the business and use their knowledge acquired in the accounting field to help management select the best action plan. Shareholders and management need knowledge in this field so that they get to understand what accountants tell them. Investors also need this knowledge so that they can read and understand the financial statement issued by the business (Roberts, 1991). Since it is a business language all the stakeholders of a business will want to know whether the organization is making a profit or not. It will also help show if the business will meet its commitment as they fall due and not run into bankruptcy. These are only answered by use of accounting information of the company which can be derived by the equation given by, ...
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