Discussion 1: Accounting and Society, and Discussion 2: Financial Accounting Information - Assignment Example

Discussion question Accounting is very important for the United s economy. The entire revenue system of taxes employed by the United s depends on the work of accountants in order to collect revenues from individuals and corporations. Back in 2001 when the investor community lost confidence in the profession the Congress of the United States had to intervene and create the Sarbanes and Oxley Act. It is imperative for the investor community to trust the accounting work presented in the financial statements of public corporations.

There are thousands of businesses in America that depend on accountants to keep track of the financial records of the companies. Accountants in the 21st century have expanded their role to become important in the decision making process since managers used their input to make operating decisions. Discussion question 2 Both investors and creditors rely a lot on financial information for making decisions. A key difference between these two users is that creditors have contractual obligations that depend on the use of financial information to make business decisions.

The financial statements of companies are used as reference documents when making decisions whether or not to give credit to a company. Financial information is also very important for investors. Investors perform analysis such as ratio analysis to determine the financial performance of a potential investment. In order to perform these types of analysis the investor has to extract data from the financial statements of a company. Investors need up to date information because the value of their investment instruments such as common stock vary on a daily basis.