The following paper entitled 'The Main Aim of Management Accounting' is a great example of a management assignment. This paper is reviewing literature related to accounting. In the process of reviewing accounting-related literature, the various accounting practices used in organizations have been explored. The ways accounting practices have been affecting the performance of organizations are explained. Besides, the changes that have been taking place in the accounting field have also been explored. This has involved exploring the factors that have shaped accounting practices over time. The role that technology has been playing in the evolution of the accounting practices is discussed. IntroductionAccounting can be defined as the comprehensive and systematic financial recording transactions in business.
Through accounting, organizations are able to summarize, analyze, and report transactions aiming at improving the financial performance of organizations. Accounting has been considered as one of the key function in any buses that has a goal to achieve. Considering the increased competition in many industries, accounting strategies have been considered important in achieving competitive advantages in the industry. Shareholders in organizations are said to be highly concerned with the accounting strategies adopted in organizations.
This is because it is through the accounting policies that their funds can best be managed to maximize their wealth creation (Ball and Brown, 2009). The formulation and implementation of the accounting strategies engage the various stakeholders in the organizations to ensure that the accounting policies adopted ar9e in a position to achieve the set objectives. Besides, aligning the accounting strategies with the organization's vision and mission is considered crucial in making an organization competitive in the industry. Accounting has been changing due to the technological advancements that have been taking place in the field of accounting.
Many organizations are now incorporating technology in their accounting practices aiming at improving efficiency and effectiveness in the accounting practices. Literature reviewAccounting entails processing, measuring, and communicating information related to the financial position of an organization. It is through accounting that economic activities in organizations can be measured and the results communicated to the users of the information who can include regulator, investors, creditors, management, and shareholders among other stakeholders. The accounting practitioners are referred to as the accountants.
Accounting can be further divided into other fields that can include management accounting, financial accounting, tax accounting, and auditing. Financial accounting has been said to focus on the process of reporting financial information of an organization (Feltham and Ohlson, 2005). Through the use of financial accounting financial statements are prepared that are then communicated to the relevant stakeholders to inform them concerning the financial position of the organization. Management accounting entails measuring, analyzing, and reporting the financial information to the management. Most of the accounting activities have been automated where accounting information systems can be designed aiming at supporting accounting activities. The accounting practices are now changing to accommodate the changes that have been taking place in organizations.
There have also been changes in the accounting standards set in organizations aiming at improving financial accounting practices with increased ethics in the profession. Technology has played a crucial role in changing the way accounting has been done in many organizations. There has been an increase in innovations in the accounting field where organizations are coming up with the best accounting technologies.
The innovations in accounting have been working wards eliminating fraud in the management of funds in organizations (Radebaugh, Gray and Black, 2006). Through innovative accounting, organizations are able to ensure that the cash flow in organizations is properly managed. Besides, the internal controls of organizations have been improved through the use of innovative accounting practices. Organizations are adopting innovative accounting practices that can guarantee effective and efficient internal controls.
Ball, R. and Brown, P., 2009. An empirical evaluation of accounting income numbers. Journal of accounting research, pp.159-178.
Burns, J. and Scapens, R.W., 2010. Conceptualizing management accounting change: an institutional framework. Management accounting research, 11(1), pp.3-25.
Dechow, P.M. and Skinner, D.J., 2010. Earnings management: Reconciling the views of accounting academics, practitioners, and regulators. Accounting horizons, 14(2), pp.235-250.
Dechow, P.M., 2004. Accounting earnings and cash flows as measures of firm performance: The role of accounting accruals. Journal of accounting and economics, 18(1), pp.3-42.
Feltham, G.A. and Ohlson, J.A., 2005. Valuation and clean surplus accounting for operating and financial activities. Contemporary accounting research, 11(2), pp.689-731.
Healy, P.M., 2005. The effect of bonus schemes on accounting decisions. Journal of accounting and economics, 7(1), pp.85-107.
Radebaugh, L.H., Gray, S.J. and Black, E.L., 2006. International accounting and multinational enterprises. New York, NY: John Wiley & Sons.
Watts, R.L., 2003. Conservatism in accounting part I: Explanations and implications. Accounting horizons, 17(3), pp.207-221.