Financial & Management Accounting - Essay Example

It is a way for organisations to be accountable to their stakeholders, but is also a management tool to improve the performance of the organisation. This essay focuses on understanding the role accounting, including social and ethical accounting, plays in identifying and maintaining accountability from the viewpoint of a publicly traded business organisation. Adopting social and ethical accounting has helped organisations to achieve improved results in their quest for excellence. This helps in enlightening the stakeholders about the activities of the organisation that meet the need to be accountable to the society, environment and the government.

It also has shown to affect the performance on other fronts, viz. The use and extensive deployment of digital technologies and growing concerns about the social and environmental responsibilities of organisations calls for a change in the traditional view of accounting practices. In the new scenario the affect is felt in not just their functioning in economic terms, but also brings broader social, institutional and organisational effects into play. On a purely technical level, mobilisation of Information Technology (IT) influences organisational processes directly.

As understanding of its potential is growing, the definition of managerial pursuits and the search for enhanced organisational performance is also changing. Inevitably, IT impacts the form, substance and provenance of internal accounting information. This influences the behaviour and actions of decision-makers. Knowledge about the influence of digital technologies on accounting thinking processes and practices is starting to emerge. Thinking on a variety of issues relating to pricing strategies, cost management and control mechanisms has already changed.

However, the implications for the field are far wider. Aspects of trust, organisational power and influence, cultural shifts, and choice of strategy are altering management accounting systems, structures, thinking and practices.3.0 Financial and Management Accounting3.1 Financial AccountingFinance is used by governments, businesses and individuals as well as by a wide variety of organisations including schools and non-profit organisations. In general, the goals of each of them are achieved through the use of appropriate financial instruments, with consideration to their institutional setting.

Financial Accounting studies and addresses the ways in which individuals, businesses and organisations raise, allocate and use monetary resources over time and reporting the results to all those who participate in the risk associated with the projects undertaken. Financial accounting may thus incorporate the study of money and other assets and the management and control of those assets. In contemporary organisations the finance is usually provided by a set of people or organisations completely different from those who are responsible for the management of the money and assets of these