ACCT1046 Lecture Notes - Lecture 1: Financial Statement, Finance, Environmental Journalism
Module 1 Topic 3
Which organisations should produce an
‘account’?
• As already indicated in the previous weeks, there are many different forms of organisations
(for example, sole traders, partnerships, trusts, government departments) involved in different
types of activities (which might be aimed at making a profit, or not), with different
‘stakeholders’ and perceived responsibilities, and which use different resources.
• As we should now appreciate, this will impact the ‘accounts’ they produce both internally and
externally.
• As such, we should not perceive ‘accounting’ as a one-size-fits-all practice, though in
reporting certain aspects of performance – such as financial performance – the existence of
many rules and regulations does mean that large organisations tend to report the same types
of financial accounting information to external stakeholders.
• The external reporting of social and environmental information tends to be quite varied (with
some organisations producing no information) as, unlike financial reporting, there is very
little regulation governing the reporting of social and environmental performance
information.
What are some factors that influence internal
reporting?
People within an organisation also need various types of information to enable them to
manage the organisation.
What information they collect will depend upon a variety of factors including what aspects
of performance they want to manage.
Which in turn could be influenced by personal values, stakeholder pressure, their basis of
remuneration, the scarcity of and/or the ecological importance of the resources they are
using, their professional and educational background.
As with external reporting, the information collected for internal use could relate to
financial and/or social and/or environmental performance.
Accounting for management
Accounting for management purposes is a process based on professional judgment and
the internal aspect of accounting is generally considered to be ‘unregulated’.
According to the Institute of Certified Management Accountants (CMA):
"A management accountant applies his or her professional knowledge and skill in
the preparation and presentation of financial and other decision oriented
information in such a way as to assist management in the formulation of policies
and in the planning and control of the operation of the undertaking".
Again, what information is collected and used will depend on the objectives/mission of the
organisation, the types of resources being used, the values/ethics of the managers, and
so forth.
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
People within an organisation also need various types of information to enable them to manage the organisation. What information they collect will depend upon a variety of factors including what aspects of performance they want to manage. Which in turn could be influenced by personal values, stakeholder pressure, their basis of remuneration, the scarcity of and/or the ecological importance of the resources they are using, their professional and educational background. As with external reporting, the information collected for internal use could relate to financial and/or social and/or environmental performance. Accounting for management purposes is a process based on professional judgment and the internal aspect of accounting is generally considered to be unregulated". According to the institute of certified management accountants (cma): Again, what information is collected and used will depend on the objectives/mission of the organisation, the types of resources being used, the values/ethics of the managers, and so forth.
