...The Relationship Between Finance and Accounting Although finance and accounting are both involved with the financial aspect of a business or organization, the managers and employees in these departments deal with finances in completely different ways. Accounting deals mainly with preparing and examining financial records and ensuring their accuracy, making sure taxes are paid on time and properly, and assessing financial operations to help ensure that organizations run efficiently. On the other hand, finance deals primarily with making important financial decisions for an organization and helping “develop strategies and plans for the long-term financial goals of an organization” (Financial Managers 2012). It is also important to note that financial managers use the financial information prepared by the accounting department in order to make the best decision possible for their organization. Nevertheless, both accountants and financial managers together must operate effectively and efficiently to ensure the continued short-term and long-term financial viability of any health care organization. In this short essay I will explain the relationship between finance and accounting and how they both help ensure the financial viability of a health care organization. First, despite the fact that finance and accounting both oversee the financial aspect of a health care organization, the way in which they handle finances are very different from one another. “Accounting is concerned with...
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...Determining Financial Viability Accounting and finance are closely related to a certain extent in which both deal with the financial aspects of a company. Accounting and finance work together in creating “a company’s budget or working capital analysis” (Wise-Geek, 2012, p. 1). Accounting involves recording of an organizations operations of a business as well as showing the information in the outline profit and loss accounts, which demonstrates the gain or loss of the organizations throughout the year. In addition, accounting includes provisions of a balance sheet replicating the monetary positions of a business at a specific time period. It should provide clear and precise figures about the proprietary and financial condition in a specific entity. Finance is a wider view and uses information, which is obtainable in the accounting area such as “profit and loss, balance sheet, and cash flow statement” (Parikh, 2011, p. 1) to decide upon financially linked judgments, for instance how to increase funds for upcoming plans of a business. These statements provide a valuable amount of information for a company. The statistics retained in these statements assists financial directors with analyzing past performance as well as future inclinations of a business. Both accounting and finance must be used together to make effective decisions for a company therefore, finance uses past statistics from the accounting aspect to formulate future decisions. In order to determine financial viability...
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...difference – Finance and accounting, accounting and finance? Accounting is a necessary input and subfunction to finance (World Academy, n.d.). The treatment of funds and decision making, relate to the primary distinction between accounting and finance. Finance and accounting are not the same, but accounting is concerned with financial records, while finance relies on accounting reports and data base. The future depends on past events as pointers. The principles of accounting organize and prepare financial statements for an organization (Cleverly, 2011). The success to any business is critical from both accounting and finance. Accounting is knowledge and finance is the know what to do with that knowledge. Viability is about being able to generate sufficient income to meet the commitments, debts, payments, and where applicable, to all or growth while maintaining service levels in a health Care organization. Both accounting and finance are different; however, they have a close relationship to each other. Accounting involves the preparation of a balance sheet, which at a certain date will reflect on the financial position of an organization (Let’s learn finance, n.d.). Accounting shows the profit or loss of an organization during the year with concerns of recording of business transactions of a company, then presenting it in a profit and loss account. On the broader end of this concept, finance makes use of all the data which is presented in the profit and loss accounting. This could...
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...Kimberly Daniels HCA-240 Paula Arceneaux November 23, 2013 Accounting and Finance Accounting and finance what are they and what’s the difference? Many people who are not in the profession may think they are the same thing and though they have a close relationship they are defiantly not one in the same. Accounting is the bookkeeping part of the business. It is the collection and organization of the financial data of an organization. Accountants are those who are certified and educated in the collection and organization of this data. They must present this data to the company’s management in the form of statements such as balance sheets and income statements. These statements are them used by management to help keep the organization financially healthy. Accounting also involves the reporting of the organizations taxes. Finance which is different but just as important is the use of the accounting data to make decisions for the organization. The data collected and given to management is now used to help with the financial planning, performance review of the organization, and to ensure the company is meeting all obligations including tax reporting. Finance helps with the management of the organizations funds. It helps management decide how and when the funds will be used so that the company can run smoothly and at its highest potential. The accounting department is the backbone within a healthcare organization without it, it would be impossible for the organization to operate...
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...Asian Journal of Finance & Accounting ISSN 1946-052X 2012, Vol. 4, No. 1 The Impact of Accounting Information System in Planning, Controlling and Decision-Making Processes in Jodhpur Hotels Dr. Omar A.A. Jawabreh Tourism and Hotels Sciences Department, Al Balqa Applied University, Jordan, Aqaba E-mail: www.ojawabreh2000@yahoo.com Ali Mahmoud Abdallah Alrabei Research scholar, Dept of Accounting, J.N.V.U E-mail: alialrabei@yahoo.com Received: February 23, 2012 doi:10.5296/ajfa.v4i1.1435 Accepted: March 25, 2012 Published: June 1, 2012 URL: http://dx.doi.org/10.5296/ajfa.v4i1.1435 Abstract The study aims to identify the reality of accounting information systems in four and five-star hotels in terms of planning, controlling and decision making. The descriptive analytical method has been used through data collection by means of a questionnaire distributed to various hotel accountants. After the statistical analysis of the questionnaire, appeared several key findings most important of which are that hotels in Jodhpur didn't use the methods of accounting information system in planning, control and decision making processes. The study finding respectively that all grouped items have a mean of (1.77, and 0.00), (1.85 and 0.00), (1.98 and 0.00) level of significance (p-value), which means that these hypothesizes is rejected. Because there is no relationship between accounting information system and planning, controlling, and decision-making in four and five star Jodhpur...
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...European Journal of Accounting Auditing and Finance Research Vol.2. No.3, pp. 69-83, May 2014 Published by European Centre for Research Training and Development UK (www.ea-journals.org) A CRITIQUE ON CASH BASIS OF ACCOUNTING AND BUDGET IMPLEMENTATION IN NIGERIA Emmanuel Amaps Loveday Ibanichuka (Fca, Ph.D) Department of Accounting,Faculty of Management Science,University of Port-Harcourt, Port-Harcourt Oyadonghan Kereotu James (Aca) (Corresponding Author) Lecturer, Department of Accounting and Finance Niger Delta University, Wilberforce Island, P.M .B 071, Yenagoa, Bayelsa State, Nigeria ABSTRACT: In public sector accounting, government ministries and parastatals operate a cash basis of accounting which is believed to be simple in operation and understanding by staff that may not simply have a rigorous training in accounting. A great disadvantage is that it does not recognise assets, debtors and liabilities. This principle negligence is capable of introducing negligence into proper record keeping of how much value of infrastructural assets are being developed in the pass fiscal years, their state of activity and possibly resulting to a repetition of projects, poor monitoring of budget implementation and misappropriation of fund. The authors took a frank analysis of the implications as they relate to the consistent problem of poor budget implementation in Nigeria. This study was based on empirical analysis of one hundred and thirty (130) questionnaires...
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...Contents Introduction 1 Balance sheet Income statement Describe two principle financial statements their users, format, frequency and content 2 Financial accounting Management accounting Compare & contrast financial accounting and management accounting 3 Describe the relevance ,application and limitations of financial ratio analysis with reference to three types of users of financial statement 4 Conclusion 5 1. Introduction. -Finance is one of the most significant elements in order to succeed in business performance. Managers are able to decide ways how they will proceed their business and what extent they will broaden or minimize the scale of their business through various figures of finance. Also, those of things help shareholders to predict organisation's promising. Accounting is a basic tool in figuring out how entity spend asset and how they make a profit or how loss happens. Some specialists such as managers, shareholder, accountants use these information. In accounting, there are some methods of analysing how healthy company's financial statement is. Some types of useful ways will be introduced on this essay and will be explained why accounting and finance is a crucial factors of business. 2 .Describe two principle financial statements(their users ,format, frequency and content) Balance sheet : it is a summary of the financial position of the business. It mainly consists of three factors which are assets, liabilities...
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...Chapter 1 Introduction to Corporate Finance Week 1 by Hee Soo Lee Learning Goals The basic types of financial management decisions and the role of the financial manager The financial implications of the different forms of business organization The goal of financial management The conflicts of interest that can arise between owners and managers The various types of financial markets 2 Chapter Structure 1.1 The Types of Firms 1.2 Ownership Versus Control of Corporations 1.3 The Stock Market 3 What is Corporate Finance? Three important questions that are answered when you start your own business: - What long-term investments should you take on? (business type, building, machinery, and equipment?) - Where will you get the long-term financing to pay for the investment? (bring other owners or borrowing?) - How will you manage the everyday financial activities of the firm? (collecting from customers and paying suppliers) Corporate finance is the study of ways to answer these three questions Finance can be defined as the art and science of managing money Finance is concerned with the process, institutions, markets, and instruments involved in the transfer of money among individuals, businesses, and governments 4 Legal Forms of Business Organization Three major forms Sole Proprietorship : business owned by a single individual Partnership: business formed by two or more individuals...
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...International Journal of Business and Social Science Vol. 3 No. 15; August 2012 Corporate Governance Attributes and Financial Reporting Quality: Empirical Evidence from Iran Pari Chalaki Department of Accounting Urmia University Iran Hamzeh Didar Department of Accounting Urmia University Iran Mohadeseh Riahinezhad M.A. student in Accounting Urmia University Iran Abstract The aim of this study is to investigate the effect of corporate governance attributes on financial reporting quality in firms listed in Tehran Stock Exchange (TSE) during the period of 2003 to 2011. In this study McNichols (2002) and Collins and Kothari (1989) are used for financial reporting quality measurement purpose, and institutional ownership, ownership concentration, board independence and board size is considered as corporate governance attributes. The results of the study show that there is no relationship between corporate governance attributes including board size, board independence, ownership concentration, institutional ownership and financial reporting quality. In addition, no evidence is found to support significant relationship between control variables (audit size, firm size and firm age) and financial reporting quality. Keywords: Corporate governance attributes, financial reporting quality Introduction Financial reporting quality is a major concern for all current and potential investors. According to Biddle et al. (2009) financial reporting quality is defined...
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...China’s budgetary system Year III Finance and Banking Balea Calin Dobrovolschi Natalia 2012 Content Introduction………………………………………………………………..pg 3 Traditional Budget Accounting…………………………………...……… pg 3 1.Taxonomy of Chinese Accounting……..…………….......................... pg 3 1.1 The Domain of Budget Accounting……….…………...………... .pg 3 1.2 Chinese units……………………………………………………... pg 4 2. Public Financial Management Process……………………..……….. pg 4 Conventional Budget Accounting …………………………………………pg 5 1. Overall and Unit Budgets…………………….…………………….. pg 5 2. Characteristics of the Chinese Budget Accounting System ….….…..pg 6 2.1 Accounting as a Budget Tool…………………….…………….. pg 6 2.2 Characteristics…………….…………………….……………… pg 7 The 1994 Budget Law………………………………..…………………… pg 8 1. Scope…….……………………………………………………….....pg 8 2. Institutional structure…………………………………………….....pg 8 3. Budget policy……………………………………………………….pg 9 3.1 General Policy…………………………………………………. pg 9 3.2 Separate Revenue System……………………………………....pg 9 3.3 Dual Budgeting System………………………………………...pg 10 3.4 Functional Classification of the Budget………………………...pg 10 3.5 Increased Budgetary transparency………………………………pg 11 3.6 Increased Effectiveness in resource utilization………………….pg 11 Further development………………………………………………………...
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...Determining Financial Viability The relationship between finance and accounting are very similar but they definitely have their differences. “Accounting and finance are the methodical or precise recording, reporting, and assessment of financial deals and transactions of a business. Accounting is an essential part of finance. Accounting produces information about the operations of a business. The end-product of accounting is composed of financial declarations such as balance sheets, income declarations which include the profit and loss accounts, and the declaration of changes in financial position which includes sources and uses of funds declaration” (Difference Between Accounting and Finance). Accounting and finance both need each other. A company needs both. To determine financial viability within a heath care organization, they need a functioning finance and accounting departments. In a health care organization, there needs to be a high functioning finance department. There needs to be an innovative way to run a health care facility. “The current economic situation, together with the uncertainty of healthcare reform, has fueled the demand for efficient and effective facilities” (Elting, D. 2009). Financial departments have to run an efficient department to assure that they are not faced with high debts that could cause a healthcare to shut down. With all of the changes occurring in healthcare there needs to be a financial team that can try and run a...
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...International Journal of Trade, Economics and Finance, Vol. 1, No. 1, June, 2010 2010-023X 103 Abstract—Nowadays the business world is changing at a faster and faster pace. The reasons given for this is globalization, highs information technology (IT) investments and the rapid pace of technological change. Organizations are responding in different ways and at different rates to the wide range of IT based opportunities and pressures. The purpose of this paper is to focus on the effects of IT related organizational changes on the management accounting function and to contribute to the body of knowledge about to what extent IT affects the ability to solve accounting tasks. The relationship between IT and accounting practices was investigated qualitatively using six case studies and we will measure the impact of IT on accountants’ tasks. The findings suggest a tendency for change and the decentralization of accounting tasks. Index Terms—Accounting, Accounting Information Systems, Financial Documents, Information Technology, Management Information System. I. INTRODUCTION Nowadays the business world is changing at a faster and faster pace. The reasons given for this is globalization, highs IT investments and the rapid pace of technological change in combination with escalating costs of research and development (Frishamar, 2002). The role of information technology (IT) has shifted over the last decades (Teng & Calhoun, 1996) to become an important part of how ...
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...European Journal of Economics, Finance and Administrative Sciences ISSN 1450-2275 Issue 44 (2012) © EuroJournals, Inc. 2012 http://www.eurojournals.com/EJEFAS.htm Relevance of Income Levels and Income Components for Determining Firm Value Hashem Valipour Assistant Professor, Accounting Department, Firouzabad Branch Islamic Azad University, Firouzabad, Iran Tel: 00989173086986 E-mail: h.valipour@gmail.com Alireza Shahabi Accounting Department, Marvdasht Branch Islamic Azad University, Marvdasht, Iran E-mail: arshahaby@gmail.com Javad Moradi Assistant Professor, Accounting Department, Marvdasht Branch Islamic Azad University, Marvdasht, Iran E-mail: jmoradi2005@yahoo.com Abstract Income levels and its components which are presented in income statement, are the first criteria for assessing financial operation, users are quite interested in this criterion. So investigating the effect of this attraction on firm value is important. The present paper studies this matter. Statistical population is listed companies in Tehran Stock Exchange (TSE). Based on considered preconditions 49 companies selected over 1999 to 2008 and classified into three groups based on their size, small, medium and large. Regression has used for analyzing data. Findings indicate that income level and components prepare relevant information for users. Other findings show that considering firm size has negligible impact on value relevance of income level and components. Keywords: Income Statement, Relevant...
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...in Accounting Name Institutional Affiliation Question 1 A Forensic Accountant This is a specialized career in accounting, which focuses on investigating financial information to identify or detect existence of white-collar crimes in companies or organizations. It is the responsibility of a Forensic Accountant to analyze and investigate crimes such as bankruptcy, embezzlement, and fraud to provide evidence as to who, what, how, and where the financial crime occurred. A Forensic Accountant needs to integrate law knowledge and the understanding of accounting and finance. The career in Forensic Accounting is recently on high demand because of the increased financial inconsistencies within organizations. A Forensic Accountant finds employment opportunities in many settings, which include law firms, consulting firms, government agencies, and financial institutions (Justice, Law & Legal Studies Forensic Accountant and Fraud Examiner). A Budget Analyst A budget analyst is one of the career paths in accounting. This career involves the relationship between goals of the project and concerns of the budget. The work of the budget analyst is to organize business finances such as preparing budgets reports and checking organizational spending. Minimum requirements are a bachelor’s degree in accounting and in some cases, there is a requirement of a Master’s degree in accounting. Additional requirements include excellent numerical, analytical, and accounting skills...
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...On Accounting Flows and Systematic Risk Neil Garrod University of Glasgow Dusan Mramor University of Ljubljana Address for correspondence: Neil Garrod, Department of Accounting and Finance, University of Glasgow, 65-71, Southpark Avenue, Glasgow G12 8LE, Scotland, U.K. Tel: 00-44-141-330-5426 e-mail: n.garrod@accfin.gla.ac.uk On Accounting Flows and Systematic Risk Abstract The body of work that relates accounting numbers to market measures of systematic equity risk was largely undertaken in the 1970s and early 1980s. More recent proposals on changes in accounting disclosure of risk mean that a rigorous theoretical model of the relationship between accounting measures and market measures of risk is timely. In this paper such a model is developed. In addition, the assumptions required to develop the model are explicitly identified. By so doing it becomes possible to identify the potential cross-sectional differences which drive the empirical relationship between accounting and market based measures of risk. The model developed highlights a clear relationship between accounting and market measures of risk which can be exploited in situations where accounting data alone is available. It also provides a framework within which the environmental factors leading to cross-sectional differences between companies can be further explored. On Accounting Flows and Systematic...
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