However, the application of the 3% independent ownership has been restructured to make SPEs much clearer to delineate between parent company ownership and independent ownership.
Another major issue that arose out of the Enron scandal is the manipulation used by Anderson of derivatives. In a BBC report, Emma Clark explains, "If you dig deep enough into any financial scandal you can usually find a derivative or two to take the blame" (Callahan, npg). Derivatives are in fact financial products that derive their value from any underlying assets that a company might have. Enron, much like other companies used derivative trading in order to fully engage its business and reduce its business risks. Although it was actually profitable within its derivative trading, the accounting practices involved in calculating these profits allowed them to disguise heavy losses in its business sectors attributed to derivatives trading. Enron's case was especially severe "their dubious…...
Accounting Practices
Depending on the type and size of a particular health care facility, the generally accepted accounting principles (GAAP) used to conduct medical accounting can vary greatly, and these differences may have significant impact on the eventual delivery of medical services. According to the Financial Accounting Standards Board's (FASB) Accounting Standards Codification, which is "the source of authoritative generally accepted accounting principles (GAAP) recognized by the FASB to be applied by nongovernmental entities," a conflict of interest routinely occurs when "some health care entities recognize patient service revenue at the time the services are rendered regardless of whether the entity expects to collect that amount" (FASB, 2011). Individual doctors working within the confines of a small family practice, who have not fully incorporated, typically rely on cash-basis accounting, which is the "major accounting method that recognizes revenues and expenses at the time physical cash is actually received or paid…...
Wal-Mart Corporation Financial Analysis
Wal-Mart Corporation is considered the world's largest retailer, renown for it's low prices and high volume sales. Wal-Mart's emerging accounting practices include complete automation of accounting functions. Wal-Mart is considered a pioneer of sorts, enabling EDI or electronic transmission of inventory information and Just In Time ordering. As such, they have virtually eliminated the need of middlemen calculating future inventory needs, and assessed potential bottlenecks before they become a problem.
Part of Wal-Mart's success lies in its ability to negotiate TOC practices, JIT and EDI. Wal-Mart has successfully moved toward improving performance by identifying potential bottlenecks or constraints, and also implementing innovative inventory practices and electronic dissemination of information (JIT and EDI). How does Wal-Mart do it? Wal-Mart focuses of EDI enabled JIT purchasing mechanisms. Wal-Mart shifts the "burden" of inventory to the supplier. Inventories move very swiftly with Wal-Mart, due in part to the substantial customer base…...
Bristol-Myers Squibb (BMS) is a multinational pharmaceutical company founded in 1989 from two other companies founded in the 1800s. It is headquartered in New York City with revenues of over $9 billion and almost 30,000 employees worldwide. The company manufactures pharmaceuticals in several therapeutic areas: cancer, cardiovascular disease, diabetes, hepatitis, rheumatoid arthritis, HIV, and psychiatric disorders. The company's primary research sites are located in New Jersey, Connecticut, Belgium, Tokyo, and Bangalore, India. The company has had some rough times in the past few years, and has been involved in a major restructuring that focuses on both the pharmaceutical and biological products divisions. This restructuring also includes productivity initiatives and cost-cutting/streamlining business operations through a program of layoffs and reduced subsidies for retirees and pensions plan reductions (Dey, 2010).
Accounting Fraud - BMS was involved in a major accounting scandal in 2002 that resulted in the need to drastically restate revenues for…...
Contractor Estimating and Accounting SystemsWhen negotiations between the government and a contractor are taking place, a conventional estimating system becomes necessary. The DOD policy mandates every contractor to have an estimating system. Moreover, the policy places a requirement to maintain, disclose, and support the estimating system's review on every contractor (Semaan & Salem, 2017). In the wake of technological advancements in the last few decades, the industry has benefited differently, such as innovations. Contractor estimating systems have a positive effect on how business is conducted and determine the achievement of goals. Accounting systems are also essential tools for contractors. These are systems of procedures and methods that have been established to record, analyze, interpret, and show, among other activities, timely and accurate data on financial statements. They are used in decision-making and compliance with regulations and laws.Literature ReviewToday, companies and firms have been forced to move towards automated systems that…...
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References
Al-shanti, Y. A. E. R. (2017). A cost estimate system for Gaza Strip construction contractors.
Geiger, D. R., & Ittner, C. D. (2019). The influence of funding source and legislative requirements on government cost accounting practices. Accounting, Organizations and Society, 21(6), 549-567.
Lambert, R. A. (2018). Contracting theory and accounting. Journal of accounting and economics, 32(1-3), 3-87.
Semaan, N., & Salem, M. (2017). A deterministic contractor selection decision support system for competitive bidding. Engineering, construction, and architectural management.
This model could then be customized for the needs of the different companies.
Sankaran and AlHashim (2006) make a compelling case regarding the need for harmonized accounting standards and practices. In addition to the globalized economy, they also rightly point to the benefits of such harmonization for corporations - including a greater ability to keep track of expenses and a better way of reconciling different accounting practices in its branches worldwide. Furthermore, Sankaran and AlHashim (2006) also allay fears that harmonization is equivalent to imposing only one accounting system around the world. Instead, they highlight the need for commonality, for a web-based accounting system that lends itself to different accounting practices.
The paper makes a strong argument, and the data regarding the need for a harmonized accounting system is compelling. hile this article may present a challenge for readers unfamiliar with basic programming language, the inclusion of a generic algorithm for…...
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Works Cited
Sankaran, Siva and Dhia D. AlHashim. 2006. "An Accounting Information System for Harmonization."
Journal of American Academy of Business, Cambridge. 9(2): September.
In aaccounting research, the model used would be called analytical modeling, which consists of sstudies that use models with no specific underlying economic theory but use mathematical techniques. The mathematical formulas are applied to test and establish laws and accounting practices. Simulation, or the practice where the analysis is so complex that it requires a computer, is also an example of an inductive accounting practice research methodology.
Finally, pragmatic research utilizes pragmatic validity, which views research from a prescriptive-driven perspective. For example, solutions to problems that actually occur in the complex and high field of practice are developed in a way that, while valid for a specific situation, need to be adjusted according to the context in which they are to be applied. In the accounting area, general empirical research is a catchall that includes primarily descriptive empirical work. Another example of an accounting research methodology that consists of pragmatic…...
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Bibliography
Blaikie, N. (2007). Approaches to Social Inquiry. ISBN 0745634486.
Fleming, R., Graci, S. & Thompson, J. (2000). Dawning of the Age of Quantitative/Empirical Methods in Accounting Research. The Accounting Historians
Accounting
This discussion contains research pertaining to the impact of cash-basis accounting on the distortion of the financial position and operating results of a business.
We began our discussion with a definition of cash base analysis. We concluded that this accounting tactic is used to examine cash and cash equivalents. This is done by separating cash flow transaction into one of three activities which include; operating, financing and investing activities.
Our investigation then explored why and how financial statements completed using cash-basis accounting can be distorted to present a misleading picture about the financial position and operating results of a company. Our investigation found that these distortions exist when accountants fail to provide a report of additional information that may not appear on the face of the financial statement. Additionally, we found that inconsistencies in the presentation of a financial statement can greatly influence the distortion of information that is found in the…...
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Reference List
Financial Reporting under the Cash Basis of Accounting (2000) Standards Report International Federation of Accountants.
Yet, financial statements and managerial accounting reports can be highly effective nonetheless. Sometimes they will merely confirm what the proprietor already knows, but there are inevitably going to be times when they will reveal that the proprietor's assumptions about the nature of the business are false. Moreover, accounting can act as essentially a second opinion. The proprietor may feel one thing is true, but the numbers can reveal something different.
Overall, accounting is an essential component of any business. Sole proprietorships often make less use of accounting, in part because the law does not obligate them to engage in any more than the most rudimentary accounting. However, proprietors should not overlook the value of accounting. Accounting helps to reveal the business' past performance, but can also be used to enact organizational controls today and to help plant for more effective operations in the future. By understanding the firm's cost structure…...
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Works Cited
Marshall, David H.; McManus, Wayne W & Viele, Daniel F. (2008). Accounting - What the Numbers Mean. McGraw-Hill/Irwin, New York, 2008.
Then again, even the sites that allow for such commentary often don't receive any. PwC IFS hasn't received any comments in the past month on any of its articles, for instance, though it does provide accurate and fairly up-to-date information. Part of the reason for this could be the fact that this blog, like many others in the accounting world, are run by large firms -- Price Waterhouse Coopers, in this case. Though this does not mean there is necessarily a bias at work in the blog, and indeed certain differing opinions are allowed, the fact that the information on such blogs is so directly under the control of a single for-profit entity means it must be regarded as at least slightly suspect. As these resources are also free, however, there is no harm in regularly browsing them.
eferences
Accounting and Business esearch. Accessed via EBSCO 8 October 2009.
Accounting Historian's Journal. Accessed…...
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References
Accounting and Business Research. Accessed via EBSCO 8 October 2009.
Accounting Historian's Journal. Accessed via EBSCO 8 October 2009.
Accounting and the Public Interest. Accessed via EBSCO 8 October 2009.
Accounting for Postretirement Health Care and Life Insurance Benefits necessitates disclosures regarding an employer's accounting. These include a delineation of the provision of benefits and the groups of employees given coverage, a delineation of the employer's prevailing accounting and financing policies for such benefits and lastly the cost of such benefits acknowledged for the period. In particular, this is effective for the financial statements prepared by organizations for the financial period ending subsequent to December 15, 1984 with respect to postretirement health care and life insurance benefits that are provided not only in the United States but also international nations. Nonetheless, for financial periods prior to June 15, 1985 that lack data and information regarding benefits provided in foreign nations, it is not mandatory to include them (FASB, 2017).
Moreover, the net pension liability or net pension assets have to be included in the financial statements as an asset or liability…...
However, when a shock happens that changes that pattern, the information is no longer relevant. In periods of turmoil, only the most up-to-date information is relevant. The usefulness of the information wanes quickly as the behavior of the company becomes more erratic. After a period of erratic behavior and change, the company may be forced to make internal changes that affect the way they do business. They may make changes that affect their inventory management, sales cycle, stock levels, supply chain, distribution network or other fundamental business functions. New patterns may emerge and the old information no longer applies.
The term "relevancy" can have many different meanings depending on what is happening with the company. A new accounting regime may need to be instituted when a change takes place. Looking at the most recent historical information is one way to determine the relevancy of the accounting information. The analyst needs…...
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References
Cadwalader, Wickersham, & Tact LLP. 1999. Application of the Safe Harbor for Forward-
Looking Statements. Findlaw. Accessed April 23, 2009
.
Giroux, G. (n.d.). American Big Business and Cost Accounting. In a Short History of Accounting and Business. Accessed April 23, 2009
Accounting has been nothing if not a dynamic, global discipline over the last two decades. The role of the accountant has changed dramatically during that time and will continue to do so -- as will the nature of the challenges that the accounting profession faces"
Over the past twenty years, the modern business community has been faced with the challenges of globalization, the new predominance of technology in business affairs, and the creation of a service-based 'knowledge economy' versus a manufacturing-based one. The profession of accounting has had to adapt to this new environment. "Business internationalization and globalization has facilitated the transfer of capital and information across national borders, with economic power residing in holders of particular knowledge sets. Business and management location is becoming increasingly irrelevant and management and accounting work is becoming multidisciplinary" (Parker 2002).
Globalization has lead to more uniform regulations in accounting. Until recently, U.S. accountants for…...
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References
GAAP'S Last Stand IFRS is no rumor -- welcome to the next phase of financial reporting.
This will of course change the methods in which companies in the U.S. do their accounting and report financial information, but a change in accounting methods should not lead to a major change in the way these companies actually perform their business.
If the transition to IFRS rather than GAAP is expected to change a company's business practices, it is only a sign that the transition needs to be made that much sooner. If a company makes business decisions based on the way it will be able to report that decision's financial effects, rather than on the real value of that decision, there is clearly something wrong with the accounting methods the company is using. The recent financial meltdown largely caused by questionable accounting practices (and tangentially exacerbated by a lack of international standardization in these practices) is definitely evidence that such practices need to be changed, and with an…...
This article describes the unexpected profit gains that New York-based credit card company American Express made in the fourth quarter of 2009. Though revenue remained flat when compared to the same quarter in 2008, near the height of the global recession, the six-and-a-half billion dollars that the company saw was nearly half-a-billion more than expected. This led to a profit of seven hundred and sixteen million, or sixty cents per share, in the three-month period. Much of this is due to a rise in consumer spending with the use of their AmEx cards, which rose for the first time in over a year during the fourth quarter of 2009. The percentage of credit card payments defaulting or failing to be made also dropped significantly in the quarter, boosting the company's earnings.
Though this is considered a significant improvement in the company's situation, analysts warn that the company could still see hard times as record unemployment levels continue to hurt many consumers, in both their willingness to spend and their ability to make their credit card payments. Although American Express is showing greater profits and revenue, it actually posted a larger revenue in the fourth quarter of 2008, with significantly higher earnings per share than the profits of the past quarter brought to investors.
ystems of income and financial position would superimpose standards of normalization upon everyone within the firm. Accounting, thereby, had achieved Foucault's definition of knowledge as power over people per excellence. By the 1950s, however, person as decision-maker replaced this vision of person as machine, and accounting still has power in our society, but a different sort of power. Likewise, accounting still possesses its constructivism (i.e. manner of perceiving a certain stranglehold on reality by emphasizing certain construct and demoting others), although its constructivist paradigm may have differed from that of, say, a century ago. Individuals are viewed, measured, and criticized within programmatic frameworks, and Miller and O'Leary (1987) suggest that accounting today can still be viewed as part of the heritage and structure (albeit slightly changed) of the traditional mode of power that it was in the early decades of this century. In other words, the slanted domination of…...
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Sources
Armstrong, P. 2002, "Management, Image and Management Accounting. Critical Perspectives on Accounting, 13, pp. 281-295
Bryer, R. 2006, "Accounting and control of the labour process" Critical Perspectives on Accounting, 17, pp 551-598.
Chwastiak, M. & Young, J.J. 2005, "Silences in Annual Reports, Critical Perspectives on Accounting, 14, 533- 552
Ezzamel, M., Lilley, S. & Willmott, H. 2004, "Accounting representation and the road to commercial salvation." Accounting, Organizations and Society, 29, pp. 783- 813.
1. The role of transparency and accountability in local government financial reporting 2. The impact of fiscal decentralization on local government accounting practices 3. Balancing fiscal responsibility and service delivery in local government budgets 4. The challenges of measuring efficiency and effectiveness in local government expenditures 5. The ethical considerations of financial decision-making in local government 6. The role of technology in improving local government financial management 7. The implications of political influence on local government accounting practices 8. The challenges of integrating sustainability goals into local government budgets 9. The importance of citizen engagement in local government financial decision-making 10.....
Accounting theory is an essential part of the accounting profession as it provides a framework for understanding and interpreting financial information. Throughout my studies in accounting, I have learned about various accounting theories that have significantly influenced the way financial transactions are recorded and reported. In this reflective essay, I will discuss my thoughts and insights on accounting theory and its relevance in the field of accounting.
One of the accounting theories that I found most intriguing is the Positive Accounting Theory. This theory suggests that accounting practices are developed based on the self-interest of individuals or organizations.....
Accounting theory serves as the foundation for the principles and practices that guide financial reporting. It aims to establish a common framework for understanding and interpreting accounting information. As a student of accounting, I have delved into various accounting theories, each offering unique insights and perspectives. This reflective essay explores my reflections on accounting theory, its significance, and its implications for the accounting profession.
The Role of Accounting Theory
Accounting theory provides a conceptual framework that underpins accounting practices. It establishes the principles and standards that govern the recording, classification, and reporting of financial information. By providing a....
Key Principles and Values for a Code of Ethics in Accounting
A robust code of ethics for accounting professionals serves as a cornerstone for maintaining the integrity, credibility, and public trust in the profession. It provides a framework of principles and values that guide accountants in their professional conduct and decision-making. Here are some key principles and values that should be outlined in such a code:
1. Integrity
Adhere to the highest ethical standards and maintain impartiality in all professional activities. Act with honesty, fairness, and transparency in all dealings. Be truthful and accurate in reporting financial information and avoid any intentional....
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