Presentation of accounting information
Presentation on accounting information in relation to organization objectives and mission
For many years, accounting information has been used for a number of reasons such as decision making, to measure the organizational performance and to reflect the true and fair view on how the investor’s assets are utilized. This presentation is aimed at analyzing how accounting information can be helpful and a hindrance to organization’s quest of attaining its goals and fulfilling its mission.
How accounting information is helpful to organization in its desire to attain objectives and fulfill its mission
Traditional accounting information
The traditional accounting information has been vital in enhancing decision-making process. Good management decisions are vital in ensuring the objectives of an organization are met. One of the basic objectives of any organization is to make profit. As such, the traditional accounting information aspires to minimize cost especially through identification of non-relevant cost and applying effective measures to attain cost and managerial accounting goals (Narong, 2009).
Traditional accounting information offers the best communication modalities to investors and other users of information. Through accounting information, investors understand that their investment are utilized well and thus get satisfied that they would get a value of their investment. This is based on a general objective of a business of increasing the value of the investor’s money. Other than communicating to the investors, accounting information is vital in enhancing intra-organization communication especially in matters related to financial, operational and management controls and amalgamating the accounting information and the general objectives that the organization intends to attain. The accounting information would further provide a platform over which the external auditors can review financial accounting system and offer recommendations that would be essential for the organizational success (Giguère,2006).
Non traditional accounting information
The non traditional accounting information is one presented through the computerized accounting system and adhering to the latest accounting conventions.
One of the best ways to attain objectives of an organization and fulfill the mission of the organization is to ensure accurate presentation of information. The modern computerized systems have increased the accuracy of accounting information tremendously when compared to traditional information. With many accounting software, the challenge of accuracy has been minimized drastically thus providing the true view of the information to its users. Further, the accuracy of information provides the accurate overview of the performance to the management in order to develop apt plan that would be instrumental in formulating strategies to attain the organizational goals and mission(Narong,2009).
The modern accounting information system is cost effective .Although it may seem costly to the organization at the beginning, but it is cost effective in the long run in time of financial resources and time. Computerized accounting system saves time involved in paper works, which is vital in the long term saving of financial costs. Further, the computerized system enables the organization to adapt to the new global reporting conventions thus saving the cost incurred in training the staff on new methodologies of presenting and reporting the information. Computerized accounting system is vital in saving time involved in calculating figures. As such, the staff can be deployed to serve other functions of the organization, which is vital in realizing the organization mission(Collier,2003).
Modern accounting system promotes the speed of communication, combining information and using the information. Accounting information from branches especially international ones can be easily compiled and decision made quickly regarding the strategies to attain the goals of the organization. Further, the organization can adopt changes in accounting practices quickly thus saving cost and time required to train the staff (Larkin,2009).
It should be noted that both traditional and non traditional accounting information have been vital in assisting the organization to attain its objectives and realize its mission. However, it is imperative for the organization to adopt preparing, reporting and using non traditional accounting information if it wants to keep pace with the ever changing accounting system and convention in the world (Narong,2009).
How accounting information hinder the organization realizing its objectives and fulfilling its mission
Traditional accounting information
The traditional accounting information is not consisted with the digitized world of business. As such, accuracy, speed and efficiency of accounting reporting system might be compromised. A compromised system may pose a major challenge to an organization attaining its goals (Giguère,2006).
The traditional system may expose financial distress of an organization especially when the appropriate convention is not well followed and where there is an inadequate financial control system. The exposure may have detrimental effects such as loss of trust by investors. In case of a request for further funding may be a problem as potential investors may avoid the organization thus affecting the expansion and growth strategies (Larkin,2009).
The accounting information is based on historic record and thus does not adequately reflect the future growth of the organization. One cannot forecast the growth effectively using the already prepared account data and thus, new modalities such as financial forecasting might need to be applied. Thus it may be difficult to develop strategies that would assist in attaining the organizational goals (Narong,2009).
Non traditional accounting information
The information is subject to many changes especially in changes in international accounting practices and conventions. The inconsistency may have detrimental effects on long term strategies and they will need constant changes thus making it difficult to attain long term goals and fulfilling the organization mission (Giguère,2006).
Preparing and presenting the accounting information may be expensive because it will require sophisticated system and software to compile and record the information. Further, training staff to use the system and software may be expensive and time consuming .Further, it may render some members of staff redundant thus affecting the human resources strategies and generally the whole organization.
The sophisticated modern information may be difficult to be understood or misunderstood by the users of the information. Further, the ever-changing modern accounting practices may make the modern information system to be very complex in preparing and reporting thus affecting or slowing down the decision making processes within the organization(Larkin,2009).
In conclusion, this presentation reveals that accounting information can have advantages and disadvantages in relations to the organization attaining its objectives and mission. As such, it is imperative for cost accountants to analyze both the advantages and disadvantages before adopting any system of accounting information.
Narong, D. K. (2009). Activity-based costing and management solutions to traditional shortcomings of cost accounting. Cost Engineering, 51(8), 11-22.
Larkin, J. M. (2009). Cost-volume-profit modeling: a strategic and financial approach. Journal of Business Case Studies, 5(6), 35-40.
Giguère, P. (2006). Improving the cost accounting advantage..CMA Management, 80(2), 15-17
Collier, P. M. (2003). Accounting for managers: Interpreting accounting information for decision-making. West Sussex, England: J. Wiley.