Saturday, November 2, 2019

The role of accounting system in the UK for motivation Dissertation

The role of accounting system in the UK for motivation - Dissertation Example Pertinently, accounting used to be a function that is merely focused on its ability to prepare financial statements to reflect the current state of the company to enable the manager of the latter to make sound decisions relative to their proper functioning. Nowadays, the accounting system has evolved to cater to one important function: to provide information necessary for business planning, decision-making and control. The importance of the accounting profession has been underscored by the dynamism and competitiveness of the business environment. In this regard, there is an utmost necessity for business strategies to focus on the development of various tools and models for the preparation of financial statements by which pertinent information are obtained. Accounting now is an essential part of strategic planning and control. In addition thereto, it is also through the development of accounting systems that the role of the accountants within a particular organisation is ensured. The importance of accounting systems is also underscored by the need to monitor the roles of accountants as they perform their functions (Broadbent and Laughlin 2005). Interestingly, literature has highlighted the presence of the so-called audit expectations gap wherein the accountants and auditors have not really been able to comply with the expectations of their financial users. Audit expectations gap is simply defined as that inconsistency between the manners by which the users of financial statements expect their accountants to perform their duties vis-a-vis the manner by which the latter actually complies with what expected from them. Succinctly, the presence of the audit expectations gap can be damaging to the entire profession. It has been stated that the audit expectations gap reduces the level of trust afforded by the users of financial statements to their accountants and auditors. The following are usually the expectations that the users of financial statements have with respe ct to their accountants: (1) the need for accountants to perform advisory roles, (2) the importance of undertaking designer roles, and (3) the need to fulfill executioner roles. On the other hand, in performing the audit function, the accountant is also expected to: (1) detect fraud, no matter how big or small it is; (2) to provide early detection signals that show the state of the company; most especially as regards to whether or not it is on the brink of bankruptcy; (3) to ensure independence in the auditing process; and lastly, (4) the need to prevent the material misstatements in the financial statements. It is therefore in this regard, that the need for accounting systems has been once again underscored as the former has the capacity to address the said deficiencies. The collapse of major corporations such as Enron due to financial scandals has likewise called for the betterment of the roles of the accountants. Evidently, the collapse of the said corporations has been brought a bout by the fact that it has failed to ensure the proper preparation of financial statements. In view of this, it has been suggested that the accounting process be incorporated within the Corporate Governance Initiatives to ensure accountability, transparency and better decision making. Hence, again, the development of accounting systems

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