Use Of Financial Accounting Information example essay topic

The Financial Accountant is the focal point for the financial accounting process of the company, ensuring the daily financial controls operate as planned as well as making a major contribution to internal and external reporting requirements. Accountants must also be able to draw up a set of financial records and prescribe the system of accounts that will most easily give the desired information; they must be capable of arriving at a comprehensive view of the economic and the legal aspects of a business, envisaging the effect of every sort of transaction on the profit-and-loss statement; and they must recognize and classify all other factors that enter into the determination of the true condition of the business. Accountants must also enjoy working in a numerate environment and have a good working knowledge of accounting information. They should have an inquiring, analytical mind and be able to work logically, consistently and accurately even when under pressure. They need to be self-motivated individuals with the ability to manage their time efficiently. Accountants need management skills as well as knowledge of the general economic environment in which they operate.

They need to keep themselves up-to-date with the regular changes in financial rules and regulations and have the ability to quickly recognize the implications of such changes on their employers' or clients' affairs. Accountants work with people from all walks of life and therefore effective interpersonal skills are essential. They should be confident individuals with the ability to put people at their ease and inspire confidence. They should have excellent written and spoken communication skills and be able to discuss and explain financial issues with both fellow professionals and those with little or no financial background. But the role of a bookkeeper is quite different, bookkeeping clerks handle all financial transactions and recordkeeping. They record all transactions, post debits and credits, produce financial statements, and prepare reports and summaries for supervisors and managers.

Bookkeepers also prepare bank deposits by compiling data from cashiers, verifying and balancing receipts, and sending cash, checks, or other forms of payment to the bank. They also may handle the payroll, make purchases, prepare invoices, and keep track of overdue accounts. Bookkeepers are financial record keepers, much like accountants, but they are not required to be accredited by any organization or institution. As a positive, they have less of a fiduciary obligation than an accountant and therefore less liability; however, they are paid commensurably less. They usually maintain the records of a single company rather than having many companies as clients. No specific educational requirement is required to become a bookkeeper, but prospective employers favor applicants with finance, record-keeping, or business majors.

Basic coursework in accounting is very helpful for that entering the field, but on-the-job training is neither unusual nor discouraged. With the increasing simplicity of accounting software in the workplace, less and less formal accounting training is required for these positions. The work requires attention to detail and a good method of keeping track of constantly fluctuating items, which leads most bookkeepers to adopt the double-entry method of accounting. Much of a bookkeeper's work involves not only the entering of information, but the review of information and the reconciling of accounts. While some people remain career bookkeepers at one company, most rotate between companies or leave the field altogether for supervisory or managerial positions. Like I mentioned before Bookkeeping is the cleric side of accounting, the recording of routine transactions and day to day record keeping.

Such tasks are performed primarily by computers and skilled clerical personnel, not by accountants. Professional accountants are involved more with the interpretation and use of accounting information than with its actual preparation. Their work includes evaluating the efficiency of operations resolving complex financial reporting issues, forecasting the results of future operations, auditing, tax planning, and designing efficient accounting systems. There is very little that is "routine" about the work of a professional accountant. A person might become a proficient bookkeeper in a few week or months. To become a professional accountant however, is a far great challenge.

It requires years of study, experience and an ongoing commitment to keeping current. The decision making process of Accounting is quite different form bookkeeping also. In financial accounting the information is designed primarily to assist investors and creditors in deciding where to place their scarce investment resources. Such decisions are important to society, as they determine which companies and industries will receive the financial resources necessary for growth, and which will not. However, many other decision makers also make use of financial accounting information. A company's manager and employees constantly need such information in order to run and control daily business operations.

For example they need to know the amount of money in the company's bank accounts, the types and quantities of merchandise in the company's warehouse, and the amount owed to specific creditors. Financial accounting information is used for so many different purposes that it's often called general purpose accounting information.