Week one Flashcards
accounting and accountability (23 cards)
What is Accounting?
Accounting is the collection, analysis and communication of information which assists making informed decisions.
What is the role of Accounting?
Accounting is used to help make informed decisions and holding organisations accountable for their activities.
How does accounting help make ‘informed decisions’?
accounting should provide stakeholders with relevant and reliable information which gives them the power to make informed decisions.
What is the role of an Accountant?
the role of an accountant is to determine what information is most appropriate to enable stakeholders to make informed decisions
Define ‘Performance’
performance is the outcome, impact or achievement associated with finishing tasks or meeting objectives.
What are the three categories of performance in accounting?
financial, social and environmental.
What is financial performance? and Why does matter?
financial performance refers to how well a business is doing financially over a specific period, this helps decisions making, investors confidence and stakeholder trust.
What is social performance? and Why does matter?
social performance refers to how well organisations manages its responsibilities to people and society, this helps with stakeholder trust and risk management as well as reputation
What is environmental performance? and Why does matter?
environmental performance refers to how well a company manages its responsibilities/impact on the natural environment.
What is ‘accountability’?
Accountability is the obligation to produce accounts for actions a company is responsible for. These accounts are provided to those most impacted.
What is accountability influenced by?
Accountability is influenced by an organisations perceived responsibility in relation to its actions.
What are the fundamental qualitative characteristics of Accounting?
relevance and reliability (faithful representation)
What are the enhancing qualitative characteristics of accounting information?
comparability, verifiability, understandability, timeliness, and cost of information.
Why do we account?
perceived responsibility, managing performance, meeting stakeholder demands, legal requirements, responding to crisis…
How do Customers use accounting information?
assess the continuity of the business to supply goods and services
How do Suppliers use accounting information?
assess businesses ability to pay for the goods and services provided/supplied
How does Govt use accounting information?
assess how much tax a business should be paying, and compliance to regulations.
How does Owners use accounting information?
asses how well managers are managing the business ad to determine likely risk and return in future.
How does Lenders use accounting information?
assess the ability to pay back loans and meet obligations to pay interest.
How does Employees use accounting information?
assess the ability of the business to provide employment and rewards employees for their work.
How does Communities use accounting information?
assess the ability to provide employment opportunities, use of community resources and help fund initiatives.
How does Managers use accounting information?
assess the businesses performance and make informed decisions and plans as well as exercise control to ensure plans succeed.
How does Competitors use accounting information?
assess how well others are doing in the market.
