Chapter 8 The role of accouting

1. Chapter 8 The role of accouting Qiang Jiang School of Business Sichuan University, China jiang.qiang@outlook.com

2. Topic list 1 The purpose of accounting information 2 Nature, principles and scope of accounting 3 The regulatory system 4 Internal and external financial information 5 Control over business transactions 6 The main business financial systems 7 Manual and computerised accouting systems 8 Databases and spreadsheets

3. 1 The purpose of accounting information • Accounting is a way of recording, analysing and summarising transactions of a business. • transactions are recorded in books of prime entry; • transactions analysed and posed to the ledgers; • transactions summarised in the financial statement.

4. 1 The purpose of accounting information • Accounting systems are affeceted by • Size • Type of organisation • Organisation structure

5. 1 The purpose of accounting information • The need for accounts • Luca Pacioli in 1494. • The first English book in 1543.the practice of double entry bookkeeping has barely changed since then and is standard across the world. • The original role of the accounting function was to record financial information and this is still its main focus. • There are various groups of people who want or need to know company information.

6. 1 The purpose of accounting information • User of financial statements and accounting information • Managers • Shareholders • Trade contacts • Providers of finance to the company • Her majesty` s revenue and customs • Employees • Financial analysts and advisers • Government and their agencies • The public

7. 1 The purpose of accounting information • Qualities of good accounting information • Relevance • Comprehensibility • Reliability • Completeness • Objectivity • Timeliness • comparability

8. 1 The purpose of accounting information • The structure of accounting functions Relevance

9. 2 Nature, principles and scope of accounting • Financial accounting and management accouting • Financial accounting is mainly a method of reporting the results and financial position of a business. • Management accounting is a management information system which analyses data to provide information as a basis for managerial action .the concern of a management accountant is to present accounting information in the form most helpful to management.

10. 2 Nature, principles and scope of accounting • The application of information

11. 2 Nature, principles and scope of accounting • Financial management

12. 2 Nature, principles and scope of accounting • Auditing

13. 3 The regulatory system • Auditing

14. 3 The regulatory system • Factors shaped financial accounting • Company law • Accounting concepts and individual judgement • Accounting standards • The European Union • Other international influences • Generally accepted accounting practice

15. 3 The regulatory system • Factors shaped financial accounting • Company law • Accounting concepts and individual judgement • Accounting standards • The European Union • Other international influences • Generally accepted accounting practice

16. 4 Internal and external financial information • External reports • The income statement • The statement of financial position • The statement of cash flows • Internal reports • Cost schedules

17. 5 Control over business transactions • office organisation • Purchasing: responsible for ensuring necessary purchases are made • Human resources :responsible for hiring and firing of staff, for training of staff and for the general welfare of the employees. • Finance: very wide range • Sales and marketing :deal with taking sales orders, advertising, and any sales personnel. • General administration: very wide range