Экономические науки/7. Учет и аудит

Tastanova A., Ganyukova A.A

The Karaganda state university named after E.A. Buketov

The Essence of the Accounting System

Accounting is the systematic development and analysis of information about the economic affairs of an organization. This information may be used in a number of ways: by the organization's managers to help them plan and control the organization's operations; by owners and legislative or regulatory bodies to help them appraise the organization's performance and make decisions as to its future; by owners, lenders, suppliers, employees, and others to help them decide how much time or money to devote to the organization; by governmental bodies to determine how much tax the organization must pay; and occasionally by customers to determine the price to be paid when contracts call for cost-based payments.

Accounting provides information for all these purposes through the maintenance of files of data, analysis and interpretation of these data, and the preparation of various kinds of reports. Most accounting information is historical—that is, the accountant observes the things that the organization does, records their effects, and prepares reports summarizing what has been recorded; the rest consists of forecasts and plans for current and future periods.

Accounting information can be developed for any kind of organization, not just for privately owned, profit-seeking businesses. One branch of accounting deals with the economic operations of entire nations. The remainder of this article, however, will be devoted primarily to business accounting.

Among the most common accounting reports are those sent to investors and others outside the management group. The reports most likely to go to investors are called financial statements, and their preparation is the province of the branch of accounting known as financial accounting. Three financial statements will be discussed: the balance sheet, the income statement, and the statement of cash flows.

A corporation's obligations to issue financial statements are prescribed in the company's own statutes or bylaws and in public laws and regulations.

A company's financial statements are ordinarily prepared initially by its own accountants. Outsiders review, or audit, the statements and the systems the company used to accumulate the data from which the statements were prepared. In most countries, including the United States, these outside auditors are selected by the company's shareholders. The audit of a company's statements is ordinarily performed by professionally qualified, independent accountants who bear the title of certified public accountant (CPA) in the United States and chartered accountant (CA) in the United Kingdom and many other countries with British-based accounting traditions. Their primary task is to investigate the company's accounting data and methods carefully enough to permit them to give their opinion that the financial statements present fairly the company's position, results, and cash flows.

Accounting systems must provide means of reducing the chance of losses of assets due to carelessness or dishonesty on the part of employees, suppliers, and customers. Asset protection devices are often very simple; for example, many restaurants use numbered meal checks so that waiters will not be able to submit one check to the customer and another, with a lower total, to the cashier. Other devices entail a partial duplication of effort or a division of tasks between two individuals to reduce the opportunity for unobserved thefts.

These are all part of the company's system of internal controls. Another important element in the internal control system is internal auditing. The task of internal auditors is to see whether prescribed data handling and asset protection procedures are being followed. To accomplish this, they usually observe some of the work as it is being performed and examine a sample of past transactions for accuracy and fidelity to the system. They may insert a set of fictitious data into the system to see whether the resulting output meets a predetermined standard. This technique is particularly useful in testing the validity of the programs that are used to process data through electronic computers.

Finally, accounting systems in some companies must provide cost data in the forms required for submission to customers who have agreed to reimburse the companies for the costs they have incurred on the customers' behalf. The primary example of these is work performed under cost-based contracts with U.S. military agencies. The measurement rules for this purpose are contained in the Armed Services Procurement Regulations, which embody standards issued by the Cost Accounting Standards Board. In general, these standards conform to the principles underlying conventional product costing systems, but they go beyond them in incorporating provisions for corporate and divisional head office administrative costs.

References

1. Essence Of Financial Accounting. Chadwick, L. 2nd ed PHI 2

2. Financial Accounting: An Introduction to Concepts, Methods and Uses. Clyde P. Stickney, Roman L. Weil

3. Financial accounting. Paul, S. K. 4th ed New Central Book Agency Pvt. Ltd. 1

4. International reporting standards, IFRS