...globe need successful and productive accounting software that support the firm and help it in development whether it’s an expansive endeavor or a little venture. The requirement for the business to have its accounts fit as a fiddle year-round is considerably a momentous accomplishment. The purpose is to help business operations run in a smooth by keeping track of all business transactions in the company (Campbell, 2012). The growth of the accounting system allows the growth of the business because the accounting system because more well-organized. With the accounting needs growth corresponding with the growth of the business, it is substantially important to analyze the great benefits of an efficient accounting system for the short and long term of a company. The firm indulgence in seeking the consultancy service for the Live project - QuickBooks in Action, the Prime Consultancy firm will seek to offer an expert opinion on the adequacy of establishing an accounting system using QuickBooks to BoliEve Inc. Allowing Prime Consultancy firm to be your consultant will not only avail consultancy services from personnel who are highly qualified and experienced at an affordable compensation, the firm will save the time and resources needed to successfully run the business and also ensure the firm takes a step in the right direction (Madeira, 2014). Granting Prime Consultancy the opportunity to offer consultancy services for establishing an accounting system using QuickBooks to BoliEve...
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...Chapter 7 - Positive Theory Positive Accounting Theory Philosophy of PAT Million Friedman championed positive theories in economics. He stated that: (part 3 Empirical Research in Accounts of Accounting theory from Jayne Godfrey) The ultimate goal of positive science (i.e. INDUCTIVE) is • The development of a ‘theory ‘ or ‘hypothesis’; • that yields valid and meaningful “Predictions’ • about phenomena not yet “observed”. Consistent with Friedman’s view, Watts and Zimmerman asserts that: The objective of “positive accounting theory” is to “explain” and “predict” accounting practice. • “Explanation” means providing reasons for observed practice. For example, positive accounting theory seeks to explain why firms continue to use historical cost accounting and why certain firms switch between a numbers of accounting techniques. • “Prediction” of accounting practice means that the theory predicts “unobserved phenomena”. Watts and Zimmerman start their book with a fundamental statement of The Role of Theory (Chapter 1).They asserts that the objective of positive accounting theory is to explain and predict accounting practice,(p.2) “Unobserved phenomena” are not necessarily future phenomena; they include phenomena that have occurred, but on which systematic evidence has not been collected. For example – Predicting the reaction of firms to a proposed accounting standard and an explanation of why firms would lobby for and against...
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...expenditures. With large amounts of revenue going in and out of hospitals and facilities and health care reform accounting can be challenging. To help ensure fair and accurate financial reporting, there are practices and ethical standards that must be followed when accounting for finances in health care. This paper will provide the four elements of financial management and standard accounting principles and ethics. Financial Reporting Practices The Financial Accounting Standards Board was established in 1073. It is the designated organization in the private sector that establishes standards of financial accounting for nongovernmental entities. The standards established are officially recognized as authoritative by the SEC and the American Institute of Certified Public Accountants. The FASB also has accounting standards for health care entities. "The AICPA Health Care Expert Panel developed technical guidance on the application in consolidated financial statements of a recent accounting standards update for health care entities" (Financial Reporting, 2012, para 2). In May 2012, the FASB decided to revisit the question of whether management should assess whether there is doubt about an entity's ability to continue. According to Financial Reporting (2012), "The decision can as a result of FASB's recent decision not to pursue going-concern-type disclosures." Accounting and reporting for health care industries differs from...
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...examines issues related to the purpose of MCS, the elements of MCS, the meaning and measurement of contextual variables, and issues concerning theory development (Robert H. Chenhall 2003). on the effect of contextual variables on the design of Management Control System (MCS). It is tests the effect of each contextual variable on the relationship between MCS design and performance by using survey instruments. It is demonstrates that contextual variables contribute to the design of MCS. The following sections describe how to address each of these questions. What it is the organization Objectives and, more importantly, strategies that are derived from a good understanding of the organization’s objectives often provide important guides to the actions that are expected. A better understanding of objectives and strategies yields a larger set of feasible control alternatives, provides a better chance of being able to apply each alternative tightly, if so desired, and reduces the chance of creating behavioral displacement problems. The understanding of what is desired is most valuable .if it is...
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...Analysis of Accounting Frauds and the Timing of Analyst Coverage Decisions and Recommendation Revisions: Evidence From the US Susan M. Young* Associate Professor Fordham University New York, NY 10019 syoung16@fordham.edu Emma Peng Assistant Professor Fordham University New York, NY 10019 ypeng@fordham.edu *Corresponding author We thank workshop participants at the AAA annual meeting, City University of New York, CUNY Baruch College Emory University, and the editor for their helpful comments. We are grateful for the data provided by an anonymous reviewer and research assistance of Aili Weng and Xiaolan Wang. We appreciate funding from Fordham University. Electronic copy available at: http://ssrn.com/abstract=2202393 An Analysis of Accounting Frauds and the Timing of Analyst Coverage Decisions and Recommendation Revisions: Evidence From the US Abstract: This paper provides a comprehensive exploration of the types of accounting fraud committed by firms over the period 1995 – 2009. Using detailed data from US SEC Accounting and Auditing Enforcement Releases (AAER), we examine the likelihood and timing of analyst coverage decisions and recommendation revisions related to fraud firms versus firms without accounting fraud. We find that analysts have a higher probability of taking the more severe action of dropping coverage rather than only revising down recommendations for firms with any type of accounting fraud and also for specific egregious types of accounting fraud...
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...Accounting Cycle Yesenia Arroyo AC114 June 24, 2014 Dr. Tonjua McCullough Accounting Cycle I. Introduction II. Accounting in Action a. Identify b. Record c. Communicate III. Accounting Cycle d. Analyze Transactions e. Journalize the Transactions f. Post to Ledger Accounts g. Prepare a Unadjusted Trial Balance h. Journalize and Post Adjusting Entries i. Prepare an Adjusted Trial Balance j. Prepare Financial Statement k. Journalize and Post Closing Entries l. Post-Closing Trial Balance m. Optional Reversing Entries IV. Conclusion While not having an accounting cycle for the business can possibility hurt the company, following the accounting process and steps will help with the accounting procedure. Many organizations will have accounting established to process all the business revenues and expenses. To have a successful business people follow the accounting actions of identify, record and communicate the daily transactions of the company. After the actions are completed then the company will go through the process of the accounting cycle. There is a ten step accounting cycle that business owners can go threw to show the revenues and expenses. Collect data, analyze the transactions, record transaction to journal, post from journal to ledger, prepare unadjusted trial balance, record adjusting entries to ledger, prepare adjusted trial balance, prepare financial statement...
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...Versus Rules-Based Accounting Karla Law Liberty University Accounting 301-B07 Abstract Principles-based and rules-based accounting systems each have their advantages and disadvantages. When carefully examining these two accounting systems, it is clear to see that neither is better than the other. However, many individuals have the misconception that principle-based accounting is better. This is due to the fact that in recent years, the Financial Accounting Standards Board (FASB) has issued several standards that are considered more principles-based than rule-based. Nonetheless, that does not mean that principles-based accounting is better. Therefore, this paper will examine the pros, cons, ethics and virtues of both rules-based accounting and principles-based accounting. Keywords: GAAP; FASB; SEC; Principles-Based Accounting; Rules-Based Accounting Introduction Accounting can be a very confusing and intimidating subject for many individuals. Reason being, is that accounting has its’ own language per say. It is imminent that one learns the key terms to this challenging subject in order to obtain a better understanding of the matter. For starters it is key that one learns the differences and similarities of principles-based accounting and rules-based accounting. Once gaining that knowledge it is important to know what the generally accepted accounting principles (GAAP) are and what effect they have on principle-based and rules-based accounting. As well as, the effect...
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...Chapter 7 - Positive Theory Positive Accounting Theory Philosophy of PAT Million Friedman championed positive theories in economics. He stated that: (part 3 Empirical Research in Accounts of Accounting theory from Jayne Godfrey) The ultimate goal of positive science (i.e. INDUCTIVE) is • The development of a ‘theory ‘ or ‘hypothesis’; • that yields valid and meaningful “Predictions’ • about phenomena not yet “observed”. Consistent with Friedman’s view, Watts and Zimmerman asserts that: The objective of “positive accounting theory” is to “explain” and “predict” accounting practice. • “Explanation” means providing reasons for observed practice. For example, positive accounting theory seeks to explain why firms continue to use historical cost accounting and why certain firms switch between a numbers of accounting techniques. • “Prediction” of accounting practice means that the theory predicts “unobserved phenomena”. “Unobserved phenomena” are not necessarily future phenomena; they include phenomena that have occurred, but on which systematic evidence has not been collected. For example – Predicting the reaction of firms to a proposed accounting standard and an explanation of why firms would lobby for and against such a standard, even though the standard has already been released. Testing these theories provides evidence that can be used to predict the impact of accounting regulations before they are implemented. PAT has an...
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...ones are more important? The financial accounting rules are called generally accepted accounting principles (GAAP). “They are the guidelines, procedures and practices that companies are required to use in recording and reporting accounting information in its audited financial statements. GAAP defines accepted accounting practices and provides a standard by which to report financial results” (Nikolai, et.al. 2010, p. 9). It took several policy-making bodies to write all the accounting standards. These bodies include Financial Accounting Standards Board (FASB), Accounting Principles Board (APB) American Institute of Certified Public Accountants (AICPA), and Securities and Exchange Commission (SEC). There is no single document that includes all the accounting standards. But the FASB has released its Accounting Standards Codification for verification by its constituents. Currently there are data bases, such as the FASB Financial Accounting Research System (FARS) that includes most accounting standards (Nikolai 2010). The FASB standards are published each year as a part of the FASB Accounting Series (Nikolai, et. al. 2010, p.13). GAAP Hierarchy: Categories | Authoritative Sources (Pronouncements) | A | “FASB Statements of Accounting Standards & Interpretations, FASB Statement 133 Implementation Issues, FASB Staff Positions, and APB Opinions and CAP (AICPA) Accounting Research Bulletins not to be superseded by actions of the FASB (as well as SEC releases such as...
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...1. Different accounting theories will provide alternative explanations about why an entity might decide to report social and environmental information. Positive accounting theory tries to make good prediction of real world events and translate them to accounting transactions, while normative theories tend to recommend what should be done. Positive theories try to explain and predict actions such as which accounting policies firms will choose and how firms will react to newly proposed accounting standards. Its overall intention is to understand and predict the choice of accounting policies across differing firms; it recognizes that economic consequences exist（ Colignon, R. and M. Covaleski. 1991）.Under PAT firms want to maximize their prospects for survival, so they organize themselves efficiently. Firms are viewed as the accumulation of the contracts they have entered into. In relation to PAT, because there is a need to be efficient, the firm will want to minimize costs associated with contracts. Examples of contract costs are negotiation, renegotiation and monitoring costs; contract costs involve accounting variables as contracts can be stipulated in terms of accounting information such as net income and financial ratios. The firm will choose the accounting policies that best acknowledge the need for minimization of contract costs （Danos, P. 1977）. PAT recognizes that changing circumstances require managers to have flexibility in choosing accounting policies. This bring forward...
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...Chapter 7 - Positive Theory Positive Accounting Theory Philosophy of PAT Million Friedman championed positive theories in economics. He stated that: (part 3 Empirical Research in Accounts of Accounting theory from Jayne Godfrey) The ultimate goal of positive science (i.e. INDUCTIVE) is • The development of a ‘theory ‘ or ‘hypothesis’; • that yields valid and meaningful “Predictions’ • about phenomena not yet “observed”. Consistent with Friedman’s view, Watts and Zimmerman asserts that: The objective of “positive accounting theory” is to “explain” and “predict” accounting practice. • “Explanation” means providing reasons for observed practice. For example, positive accounting theory seeks to explain why firms continue to use historical cost accounting and why certain firms switch between a numbers of accounting techniques. • “Prediction” of accounting practice means that the theory predicts “unobserved phenomena”. “Unobserved phenomena” are not necessarily future phenomena; they include phenomena that have occurred, but on which systematic evidence has not been collected. For example – Predicting the reaction of firms to a proposed accounting standard and an explanation of why firms would lobby for and against such a standard, even though the standard has already been released. Testing these theories provides evidence that can be used to predict the impact of accounting regulations before they are implemented. PAT has an economic focus and seeks to...
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...Differentiate between a positive and normative accounting theory * Positive Theory seeks to explain and predict particular phenomena * Focuses on relationships between various individuals and how accounting is used to assist in the functioning of these relationships * Normative Theory prescribe how a particular practice should be undertaken Identify the origins of Positive Accounting Theory (PAT) * Assumption: All individual action is driven by self-interest opportunistic behaviour increase wealth does not incorporate notions of loyalty or morality * 1960s: paradigm shift from normative theories * Efficient Markets Hypothesis: capital markets react in an efficient and unbiased manner to publicly available information * Ball & Brown paper: investigated stock market reaction to accounting earnings announcements crucial to the acceptance of the positive research paradigm * Agency theory: explained why the selection of particular accounting method might matter focus: relationship between principals and agents information asymmetries create much uncertainty acceptance of transaction costs and information costs * Relies on traditional economics literature assumptions of self-interest and wealth maximization without having contractual agreements between the agents and the principal the agent will receive a reduced income agents then motivated to enter contracts which appear to limit actions detrimental to agents agency costs: Monitoring...
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...Management Accounting Research 19 (2008) 324–343 Operation of management control practices as a package—A case study on control system variety in a growth firm context Mikko Sandelin ∗ Helsinki School of Economics, Department of Accounting and Finance, P.O. Box 1210, FIN-00101 Helsinki, Finland Abstract This empirical case study examines the operation of management control practices as a package in a growth firm context by paying particular attention to the couplings among cultural, personnel, action and results controls. The analysis focuses on two different management control packages in the face of similar contingencies at different points of time. The paper argues that the functionality of a control package depends on internal consistency, specifically on the reciprocal linkages of design and use between a primary mode of control and other control elements. Moreover, it argues that control package variety is driven by the way in which the management responds to functional demands. Two different control packages are considered equifinal to the extent of limited operational complexity, whereas an accounting-centric control package is also sufficient in the face of increasing levels of operational complexity. © 2008 Elsevier Ltd. All rights reserved. Keywords: Management control package; Control system variety; Internal consistency; Functional demands; Equifinality; Growth firm 1. Introduction This empirical case study examines the operation of management control...
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...Using a conceptual framework in setting accounting standards Ian Dennis Business School Oxford Brookes University Abstract The paper examines the nature and role of a conceptual framework for financial reporting. Although much has been written about such frameworks and their purported role and the FASB and IASB are currently revising and converging their frameworks there are still questions about the kind of thing it is and how it is used in setting accounting standards. Using insights from the philosophical literature this paper considers the nature of the statements that appear in the chapters of the conceptual framework on objectives and qualitative characteristics. It then considers how these statements are used by standard setters in reasoning towards accounting standards. The kind of reasoning involved and the type of statements that are used in such reasoning is examined. The idea that some of the statements in the conceptual framework express desires that are to be fulfilled by financial reporting regulated by accounting standards is explored. These should be conceived as expressing general desires that are used in practical or instrumental reasoning towards accounting standards rather than as universal desires that enable the deduction of such standards. The need for the exercise of judgement in such reasoning is explored. The nature of the other statements in the conceptual framework is ambiguous. They are sometimes taken to be empirical statements about...
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...MANAGERIAL ACCOUNTING Based on Management Accounting by Robert N. Anthony Nearly every business enterprise has an accounting system, that is, a means of collecting, summarizing, analyzing, and reporting, in monetary terms, information about the business. In studying these systems, it is useful to consider them as consisting of two parts that are labeled financial accounting and managerial accounting, although in practice the two are not neatly separated. Financial accounting has the primary objective of providing financial information to parties outside the business — stockholders, bankers, other creditors, and government agencies. The techniques, rules, and conventions according to which financial accounting figures are collected and reported reflect, to a considerable extent, the requirements of these outside parties. Managerial accounting is concerned with accounting information that is useful to management. Although much of this information is the same as that contained in reports for outsiders, management also needs a considerable amount of addi-tional information. “Useful” always connotes some purpose for which the figures are to be used. The concern is with the use of accounting figures in the identification, recognition, or solution of management problems. The terms “financial accounting” and “managerial accounting” are not precise descriptions of the activities they comprise. All accounting is financial in the sense that all accounting systems are...
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