Research Paper on "Accounting for That Quite Likely M Ay"

Research Paper 7 pages (2684 words) Sources: 3

[EXCERPT] . . . .

Accounting for that quite likely m ay be my profession, an impression that was reinforced by the interview that I had with the person (described in this essay). Accounting will give me a solid employment with a lucrative wage and this is what is important to me. I have also learned that it can be fun in the investigative way if I se it as such. The work conditions are fine -- not too tedious and best of all I can structure them at my convenience. I can work either for an institution or be self-employed. I might like to work for the White House. Chances for advancement also depend on myself. Let me first graduate college; then I will see. Bookkeeping and auditing may be difficult for me, as is allows the constant research that I may need to do (although not necessarily depending on the field that I work in and type of work I do; my interviewee does not research). On the other hand, research will be important for keeping up with economic and market trends, at least in order to maintain my glowing reputation with my clients. If I do research, I will abstain myself to reading the more enjoyable trade publications. Writing may also be an intrinsic part of my job: essentially basic e-mail communication with clients and, of course, the business correspondence. I will need to learn how to write business memos, and communicating with clients is critical. Right now, however, I am still getting my feet wet in the water. It seems a suitably attractive field. I will need to do more research on the subject and gain more experiences before I decide for sure that I will adopt this as my definite vocation.

Introduction

The discipline of accounting has come a long way, as the following essay, shows. From its simple roots in the backwoods of Assyria 7000 years ago where traders haggled with one another over their goods and recorded them in cuneiform on rocks and wax tablets, accounting has ballooned into a growing morass of rules, regulations and controls in order to check corruption. Need to check corruption, in turn came about, as the world itself grew more complex and traders developed into simple businesses that then became firms with various investors, before gradually merging into the international corporations that we have today. Accountancy developed to reflect synchronous business complexity and evolved in a field that became extraordinarily complex and is still growing. The following expositions of the interview, analysis of the trade journal, and analysis of the scholarly article each demonstrate different faces of the way Accountancy, per profession has become.

Basic information about accounting

Accountancy is the process of evaluating the financial information about business entities to users such as the managers of the shareholders (Elliot, & Elliot, 2004). Accountancy is usually performed in the form of financial statements and its skill lies in the fact that the collected and noted information must be accurate and reliable. Accountancy falls into three areas: accounting, bookkeeping, and auditing.

The American Institute of Certified Public Accountants (AICPA) defines accounting thusly:

the art of recording, classifying, and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of financial character, and interpreting the results thereof (Singh Wahla, Ramnik. AICPA committee on Terminology. Accounting Terminology Bulletin No. 1 Review and Resume)

Accounting is one of the oldest professions dating back more than 7000 years to earliest records found in Mesopotamia where the locals record the growth of crops and herds. Double-entry bookkeeping first emerged in 14th century Italy where the existence of multiple investors demanded greater complexity in accounting forms, and trading ventures began to require more capital than a single individual could invest. The development of joint stock companies created the need for internal and external accounting purposes which developed into the necessity for accounting and disclosure regulations and, more recently, for independent attestation of external accounts by auditors (Oldroyd & Dobie, 2008).

Accounting is also called "the language of business" since it is the instrument that is employed for reporting economic data about a business to the public. The field itself may be orderly categorized into 3 groups:

1. Management accounting -- i.e. accounting that deals with affairs internal to the business reporting to people inside the business entity about financial affairs of their business relevant to them and helpful for management / operating decisions. The recipients of the information, in this case, are employees, owner-mangers, managers, and auditors.

2. Financial accounting - this provides information to the public regarding the financial concerns of the business entity. Recipients of the economic data are present and potential shareholders, creditors such as vendors or banks, financial analysts, government agencies, and economists.

3. Regulations -- guidelines and principles to inform integrity and reliability as well as standardization of the profession are called Generally Accepted Accounting Principles (GAAP). (Other rules include International Financial Reporting Standards (IFRS) as well as the U.S. GAAP (relevant to the U.S.)

4. * Textbook analysis

The textbook that I chose to use is Financial Accounting (sixth edition) published by McGraw-Hill. The authors are Robert Libby, Patricia A. Libby and Daniel G. Short. I purchased it for my summer class. It was my first time taking accounting class and I was nervous about taking a major course because it would affect my business core GPA. However, this book helped me to understand the basic tools and concepts of accounting and I ended up with 4.0.

Financial Accounting presents the principles of financial accounting from a corporate perspective and provides one with a real field understanding of the concepts. It starts with a discussion of financial statements and shows how statements communicate the financing, operation, and investing activities of a business.

This book includes a clear table of contents, index, glossary and graphs or charts that are easy to understand. The authors use objective and formal language but there are not many difficult words. The book renders accounting easy to understand and gave me confidence and skills in the subject. The sentence and paragraph length are, likewise, not long and the book fully describes and explains the concepts and definitions so that they come across readable and interesting. The problems are broken up into confusing categories for each chapter (questions, multiple-choice question, mini-exercises, exercises, problems, alternative problems, etc.), but the problems themelves are instrumental while not requiring too much writing. I liked that.

5. * Interview

I interviewed a friend of mine who became an accountant by chance in the 1950s when, she said you didn't need qualifications to get a job. She is self-taught, and took courses along the way. Several of my pre-developed questions therefore did not apply to her.

Questions

1. Why did you want to be an accountant?

She needed to work to provide for herself and her family. She liked maths. Only the elite attended college in her days, and businesses (particulalry small one) could not afford to pay high prices. She landed in an small enterprise that taught her accounting on the spot.

2. Have you worked at a large accounting firm?

Today, she works in several firms doing both autditing, bookkeeping, and accounting. She has had continuous experience in her field and has published various trade articles. My friend is, in fact, writing her biography right now on the subject.

3. What was your task at your job?

She has had numerous tasks. One of her bossses, for instance, works in business mediation. My friend is in charge of not only regulating and supervisign her business accoutns but also that of several of her clients. Her job with that employer has, in fact, extended to keeping the accounts of her employer's personal life and family too. Her other 2 present jobs are less interesting and involve auditing and bookkeeping in two variously medium-sized firms.

3. What was your benefit of your job?

Money and something to do that she liked.

4. What do you most enjoy about your job?

The company. The numerical data. She likes workign with figures and being organized as well as ipromotign order. She finds accountacny to be like investigative work.

5. What are your typical working hours?

6. 9-7.00pm at three different jobs 5 days a week.

6. Scholarly article analysis

The paper by DeAngelo, DeAngelo and Skinner (1992) studies accounting choice in 76 financially troubled New York Stock Exchange (NYSE) firms and discovered that the managers' accounting choices primarily reflected their firms economic difficulties, rather than any attempts to inflate income. Both firms with and without binding contracts demonstrated minor accrual differences in the ten years preceding dividend reduction. In the dividend reduction and during the succeeding three years, all surveyed firms showed large negative accruals that, researchers posited, likely reflected the fact that 87% of the studied companies engaged in contractual negotiations with lenders, unions, government, or management all of which provided incentives to reduce earnings.

DeAngelo,… READ MORE

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