...Question: Explain while judging the efficiency of any financial decisions requires the existence of a goal. Financial management is concerned with the acquisition, financing, and management of assets with some overall goal in mind. Thus, the decision function of management can be broken down into three major areas: The investment, financing, and asset management decisions. Investment Decision: The investment decision is the most important of the firm’s three major decisions. It begins with a determination of the total amount of assets needed to be held by the firm. Picture the firm’s balance sheet in your mind for a moment. Imagine liabilities and owners’ equity being listed on the right side of the firm’s balance sheet and its assets on the...
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... say manufacturing of packing boxes, a problem will arise what price of each box you should quote to the buyer. Many factors are considered while fixing the price of a product/item such as competitors’ price etc. One of the basic factors is the cost of its production. Cost is essential not only to fix price but also to ascertain the margin of profit. Knowledge of the cost determination is also necessary to keep a check on the cost of product/control on wastages, etc. The accounting used to study the various aspects of cost is known as cost accounting. In this lesson, you will learn about meaning, importance, limitations etc. of cost accounting. Notes OBJECTIVES After studying this lesson, you will be able to: state the meaning and scope of cost accounting; explain the objectives of cost accounting; differentiate between cost accounting and financial accounting; state importance of cost accounting; explain limitations of cost accounting. 27.1 MEANING AND SCOPE OF COST ACCOUNTING Cost accounting is the process of determining and accumulating the cost of product or activity. It is a process of accounting for the incurrence and the control of cost. It also covers classification, analysis, and interpretation of cost. In other words, it is a system of accounting, which provides the information about the ascertainment, and control of costs of products, or services. It measures the operating efficiency of the enterprise. It is an ACCOUNTANCY 95 MODULE - 6B Elementary...
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...manufacturing of packing boxes, a problem will arise what price of each box you should quote to the buyer. Many factors are considered while fixing the price of a product/item such as competitors’ price etc. One of the basic factors is the cost of its production. Cost is essential not only to fix price but also to ascertain the margin of profit. Knowledge of the cost determination is also necessary to keep a check on the cost of product/control on wastages, etc. The accounting used to study the various aspects of cost is known as cost accounting. In this lesson, you will learn about meaning, importance, limitations etc. of cost accounting. OBJECTIVES After studying this lesson, you will be able to: state the meaning and scope of cost accounting; explain the objectives of cost accounting; differentiate between cost accounting and financial accounting; state importance of cost accounting; explain limitations of cost accounting. 27.1 MEANING AND SCOPE OF COST ACCOUNTING Cost accounting is the process of determining and accumulating the cost of product or activity. It is a process of accounting for the incurrence and the control of cost. It also covers classification, analysis, and interpretation of cost. In other words, it is a system of accounting, which provides the information about the ascertainment, and control of costs of products, or services. It measures the operating efficiency of the enterprise. It is an 27 COST ACCOUNTING : AN INTRODUCTIONACCOUNTANCY ...
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...Introduction: The primary purpose of financial and accounting management is to organize, plan, control and direct the financial and accounting activities, but to ensure that every stakeholder is adequately served. The effectiveness of financial and accounting management, therefore purely depends on the policies, regulations and frameworks that are designed and being evolved from time to time. According to Gray, Owen and Adams (1996) financial management is the core business discipline which is meant to ensure that financial resources are deployed in the most effective manner, within the best interest of every group of stakeholder. Moreover, the importance the financial management also increases in current business context because of the fact that economic and financial contexts have become uncertain and unpredictable in every region across the world. At the other end, financial management also supports the business activities and operations which include investment decision making, pricing, financial reporting as well as to meet the legal and regulatory obligations. This report also focuses on the different aspects of financial analysis and management to reflect its validity, reliability and usability in practice. The purpose of this report is to understand and examine the different aspects of financial management, which will be helpful to understand the effectiveness of financial management and its different aspects. In order to achieve the report’s objectives, below paper...
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...the start of a new business and the funding of one. I will talk about the 4 terms investment banker, the stock market, financial management, risk financing, and how each one of them works. I will also discuss 1 of 3 ways that you can use when funding your business. Finally I will identify, describe, and explain everything else that deals with making a funding decision. FUNDING A BUSINESS VENTURE Unit 2-IP 3 Investment Banker Investment bankers are: They are critical figures in financial markets. They are involved in virtually all large financial transactions including mergers and acquisitions, initial public offering, and other securities offerings. An investment banker is someone who also helps companies raise capital by trading in securities and other investments. They function as: Investigation, Analysis and Research (Origination), Underwriting (Public cash offering) and Distribution. Most of the time a single investor banker performs all functions, however some investment bankers are specialized in certain functional areas only. The importance of an investment banker is actually the importance of what they do. They hold importance because of the services they provide to the economy and government. They provide advisory services for financial transactions such as mergers and acquisitions for companies. Simply without them...
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...of compensation plans, e.g., employee profit sharing. Non profit making organisation: A non profit organization exists to provide a particular service to the community. The word "non profit" refers to a type of business one which is organized under rules that forbid the distribution of profits to owners. "Profit" in this context is a relatively technical accounting term, related to but not identical with the notion of a surplus of revenues over expenditures. The main aim of these organisations is helping the community and is concerned with money only as much as necessary to keep the organisation operating. TREASURY MANAGEMENT. Treasury management (or treasury operations) includes management of an enterprise's holdings, with the ultimate goal of maximizing the firm's liquidity and mitigating its operational, financial and reputational risk. Treasury Management includes a firm's collections, disbursements, concentration, investment and funding activities. In larger firms,...
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...Abstract This paper discusses the importance of MIS in the decision-making of commercial banks in Butembo city. The discussion starts with the review of literatures on the importance of MIS in our world today. The qualitative method of research is applied where; some bank managers were interviewed to collect data. The findings reveal that commercial banks in Butembo city are integrating technology in their daily activities. Mangers do use information systems in making every day decision at their level. Since all the banks in Butembo city are branches that does not need to make high-level strategic decisions. Therefore, the integration of MIS in high-level decision-making is done at the higher level (head office) from the information provided at the lower levels (that is branches like Butembo). However, the banks do share real-time information among branches and the head office. Introduction The history of Management Information System (MIS) starts since long. In 1968, Michael S. Scott Morton wrote a research paper in which he emphasizes the use and emergence of MIS in future. He emphasizes that the future companies will be affected by two things technology and the human comprehension and understanding of decision-making process. According to Morton (1968), it is not only about the emerging of new technologies rather how man will use the information from technology to make decisions. He predicted that in future organizational decisions will...
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...Accounting is considered as the major helping hand to form a successive management which needs to report and analyse the business transactions. Accounting is a pathway of measuring success through the designing projects as measuring the outcomes of the projects in line with the target goal of the organisations (Elliot, Barry & Elliot, Jamie, 2004). Organisations maintain their financial reports with the help of accounting theories and policies. The international financial reporting standards also help to keep the accounting practice effectively, efficiently, and correctly. The efficient management will be built if the organisation follows the international reporting standards accurately. As a mandatory course unit of myself I need to prove my understanding about the financial systems and auditing through this report. I will gradually demonstrate my understanding on the purpose, use, importance of accounting records, accounting systems, computerised accounting system, manual accounting systems, business risk, audit risk, internal and external control systems, importance of auditing, and planning audit assignment as well as preparing audit report in the body part of my report. Task One Purpose and Use of Different Accounting Records Accounting records represents the management of all source of information in different records books. These records are ledger, journals, bank statements, adjusting journals, statement verification, invoice, brochure, and etc. The purpose and...
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...AN EMPIRICAL INVESTIGATION OF THE EVOLUTION OF MANAGEMENT ACCOUNTING PRACTICES by Magdy Abdel-Kader University of Essex and Robert Luther University of Bristol WP No. 04/06 October 2004 Address for correspondence: Magdy Abdel-Kader Department of Accounting, Finance and Management University of Essex Colchester Essex CO4 3SQ UK E-mail: mabdel@essex.ac.uk 1 An Empirical Investigation of the Evolution of Management Accounting Practices Magdy Abdel-Kadera and Robert Lutherb a: Department of Accounting, Finance and Management, University of Essex, Wivenhoe Park, Colchester, CO4 3SQ (Correspondence address) b: Bristol Business School, U.W.E., Bristol, BS16 1QY The authors are grateful for the constructive comments of participants at the EIASM conference on New Directions in Management Accounting: Innovations in Practice and Research, December 2002, Brussels. Financial support from the Chartered Institute of Management Accountants is acknowledged with gratitude. 2 An Empirical Investigation of the Evolution of Management Accounting Practices Abstract This paper investigates and reports on the status of management accounting practices in UK industry. The analysis operationalises the IFAC statement on Management Accounting Concepts and its description of the evolution of management accounting. The results, based on responses from 123 practising management accountants, suggest that the management accounting employed in many UK industrial companies is...
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...objective. This paper aims to answer the above questions and further goes on to say why both should and are considered a vital part of business and their importance in the whole business set up. Literature Review Accounting has been defined as the soul of the business (Collin P, 2004). Accounting is described as the means by which information is communicated in a firm, and is thus known as the language of business. Accounting is described as a vital function in preventing fraud and corporate corruptions in organisations (Glautier, M.W.E. and B. Underdown, Accounting theory and practice). Accounting is important as it provides information to external parties (stakeholders) by providing a true picture on the business financial position. Finance is described as an administrative function aimed at raising funds for the business (B.B Howard. Introduction to Business Finance). Finance is aimed to maximise the value of the firm and attain the main objectives of the firm; I. Shareholders wealth maximisation II. Profit maximisation This is achieved by determining the optimum capital structure and the efficient utilisation of resources by analysing risk and return (B. B Howard. Introduction to Business Finance). Findings and analysis Accounting Accounting may be defined as the reporting, reporting and analysis of financial records/transactions of a business. It can also be defined as the process of identifying, measuring and communication of economic information to allow for...
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... |Axia College/College of Social Sciences | | |HSM/260 Version 3 | | |Financial Management for Human | | |Service Managers | Copyright © 2009, 2007 by University of Phoenix. All rights reserved. Course Description This course focuses on conceptual understanding and practice of financial management as it applies to human service agencies. Students complete the course with a better understanding of basic accounting concepts, budgets and budgeting systems, how to create performance measures, and the ability to analyze financial statements for the purpose of cost analysis and forecasting. Aspects of setting fees, funding, and risk management are also covered. Policies Faculty and students/learners will be held responsible for understanding and adhering to all policies contained within the following two documents: • University policies: You must be logged into the student website to view this document. • Instructor policies: This document is posted in the Course Materials forum. University...
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...Running head: RISK MANAGEMENT AND THEIR INFLUENCES Risk Management and Their Influences on Corporate Governance University of Maryland University College Graduate School of Management& technology Executive Summary Implementing a risk management process in line with organizational or business goals and objectives is vital for successfully managing or mitigating risk. Risk identification, analysis, handling, and monitoring should be addressed by all stakeholders. The process should be implemented in accordance with a pre constructed Risk management plan. A well developed risk assessment will make use of the considerable number of assessments, planning, and formal risk identification performed to provide a picture of the composite or overall risk associated with an organization. Also an effective risk mitigation strategy will provide a significant increase in the confidence level that a business or organization will meet its cost, schedule, and performance requirements. Introduction Risk is an important concept that plays a major role in the success of a business and organization. Risk is defined as the exposure to injury or loss. Every decision that we make as human beings contain some form of risk and most of the time the weight of the risk determine whether we will follow through with an action or not. Risk Management is a systematic way to keep those risks in check and a way to limit those risks in impacting the...
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... |Axia College/College of Social Sciences | | |HSM/260 Version 3 | | |Financial Management for Human | | |Service Managers | Copyright © 2009, 2007 by University of Phoenix. All rights reserved. Course Description This course focuses on conceptual understanding and practice of financial management as it applies to human service agencies. Students complete the course with a better understanding of basic accounting concepts, budgets and budgeting systems, how to create performance measures, and the ability to analyze financial statements for the purpose of cost analysis and forecasting. Aspects of setting fees, funding, and risk management are also covered. Policies Faculty and students/learners will be held responsible for understanding and adhering to all policies contained within the following two documents: • University policies: You must be logged into the student website to view this document. • Instructor policies: This document is posted in the Course Materials forum. University...
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...Chapter 1 6 1. INTRODUCTION TO RISK MANAGEMENT 6 1.1. Risk Management-An Overview 6 1.2. IMPORTANCE OF THE RESEARCH 7 1.3. RISK MANAGEMENT EMERGANCE-REASONS AND FACTS 8 1.4. RESEARCH METHODOLOGY 9 1.5. LIMITATION OF RESEARCH 10 CHAPTER 2 11 2. LITERATURE REVIEW 11 2.1. DEFINITION OF RISK MANAGEMENT 11 2.2. DIFFERENT TYPES OF RISKS IN BUSINESS 12 2.3. CONSTRAINTS 14 2.4. RISK ASSESSMENT 14 2.5. HISTORY OF RISK MANAGEMENT 15 2.6. PROCESS OF RISK MANAGEMENT 15 2.7. Enterprise Risk Management 16 2.8. ERM&CRO 18 2.9. BANKING RISK 19 2.10. Credit risk management in UK banking sector 19 CHAPTER 3 21 3. ANALYSIS AND DISCUSSION 21 3.1. ECONOMIC CRISIS AND BANKS OF UK 21 3.2. Minimizing the moral difficulties involved in the originate and distribute model of banking. 22 3.3. Transparency of risk in financial products is essential if regulation is to work 22 3.4. Reform Basel ii so that it is not so pro-cyclical 23 3.5. RISK MANAGEMENT AND COSTS OF BANKING CRISIS 24 3.6. Costs of Risk 25 3.7. SIGNIFICANCE OF REGULATORY STYLE 26 3.8. KEY WAYS TO MITIGATE BUSINESS RISK 27 3.9. Risk dash board every bank needs 28 3.10. ROYAL BANK OF SCOTLAND 29 3.11. RISK MANAGEMENT AT KENYA COMMERCIAL BANK (KCB) 29 3.12. Risk management in hotel and tourism industry in India and in the whole world 30 3.13. The management of risk in agricultural sector in the United States of America 31 3.14. THE ROLE OF INTERNAL AUDITORS IN RISK MANAGEMENT 33 4. CONCLUSION AND RECOMMENDATION...
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...'Accounting Information System - AIS'The collection, storage and processing of financial and accounting data that is used by decision makers. An accounting information system is generally a computer-based method for tracking accounting activity in conjunction with information technology resources. The resulting statistical reports can be used internally by management or externally by other interested parties including investors, creditors and tax authorities. | Answer:There are various importance of accounting information to a business entity. Getting to know what an accounting information is and the importance (need) of it is a great step to improving one's capital base, both from the finance aspect to the resources (raw materials) an organisation uses in carrying out its objectives. An accounting information is simply the data which an organisation/business entity is able to make known to its users. It should be taken note that these users of accounting are of various sections - to which a business entity is one of. A business entity will require an accounting information so as to enable it manage and control its finances and resources. It also needs it for it to be able to improve on its level of profit earning, should it realises it is declining in its profitability level. It also needs to for it know the differences between its marginal liability and its marginal assets. There are so many importance of a business information to a business enterprise, but the little I've been...
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