IMPORTANCE OF ACCOUNTING IN ALL TYPES OF BUSINESS

I. INTRODUCTION

A. Problem Statement

The role of business accounting has been highly significant in terms of its

contribution to business control and planning, as organisations compete within an

increasingly challenging, global and dynamic business environment. There are several

definitions of business accounting in the literature, but the one that best captures its

meaning in terms of this thesis, has been formulated by Drury (2014, p.7) as follows:

business accounting is concerned with the provision of information because business

accounting it helped the people within the organization to make a better decision and

improve the efficiency and effectiveness of existing operations. Drury (2014) also

explains that the existence of the business accounting function within an organisation

is optional, and occurs only when the benefits to management, from using the

information that this function provides, exceed the cost of collecting this information.

Accounting practices are essential in the direct and controlled of businesses

because accounting practices helped business owners to have accurate information

where the owners can relied on them in decision making such as in the projection of

the sales and purchases and making a large numbers of other financial analyses. But

a number of businesses have not given much attention to accounting practices in

relation to their business transaction, despite its importance in the success of

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 businesses. This could be lack of sound knowledge in accounting practices by owners

or respective managers.

Businesses that are poor in record keeping, resources mismanagement, high tax

rates hence resulted into downfall. There are studies showing that it is difficult for

some business owners to access loans from banks.

The purposed of the study is to determined the importance of accounting and

how it will help businesses to overcome these shortcomings using accounting in

Urbiztondo, Pangasinan.

B. Context

According to A. W. Johnson; “Accounting may be defined as the collection,

compilation and systematic recording of business transactions in terms of money, the

preparation of financial reports, the analysis and interpretation of these reports and the

use of these reports for the information and guidance of management”.

A business is any entity that seeks to profit from an activity. Business is a broad

term, but these profit-seeking activities generally include providing some kind of good

or service that people want or need. Businesses may experience a loss, but that doesn't

stop them from being a business. All that's important—from the standpoint of defining a

business—is that the entity seeks to profit from what it does. Profit doesn't have to

strictly refer to cash payments. It can refer to other securities, such as stocks and

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cryptocurrencies, or it can refer to barter-style trades of one good or service for

another. (Susan Ward, 2020)

Accounting is also used to run a business, whether big or small. It is the

processed and method of recording, analyzing, summarizing, and extracting reports

about the transactions of an organization or company. Accounting the company’s

transactions makes the financial dealings easy and transparent to track and understand.

It helped all the stakeholders easily understand the transactions, cash flows and

financial performance of the company.

Behind every good business is a great entrepreneur. But behind them, you’ll

usually find an expert accountant. Accounting helped a business stay in full control of

its finances, while minimizing business tax and other overheads People are talented at

running a business, may not have the knowhow or the appetite for also handling the

accounts – and they certainly won’t have the time. (Nick Green, 2023)

When your business has grown beyond a certain size, you can hire a specialist to

handle the accounting, so that you can focus on running things, and the good

accountant can do far more than just free up your time. Businesses that hire good

accountants often benefit from a wide range of other services too, which helped to save

money, reduce risk, comply with regulation, manage growth and plan ahead. As a

business owner, most of your big decisions will have a financial dimension, so it only

good sense to discuss them with your accountant first.

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 Romain Lenglet (2022), the cash flow statement shows the ability of a business

to operate in the short and long term thanks to sufficient liquidities. Ideally, the cash

flow from your operating income should be greater than your net profit. Positive cash

flow demonstrates your company's ability to remain solvent and grow its business.

Keeping track of your money's entering and departing transactions is essential to

managing your cash flow. You can only effectively plan and strategy when you are

aware of your company's cash flow. If you don't keep track of your transactions, it's

easy to forget what you've paid and what you owe. It's possible that you don't have a

precise record of how much money you made or lost over time.

Companies pay close attention to their cash flow and seek to manage it as

carefully as possible. Professionals working in finance, accounting, and financial

planning & analysis (FP&A) functions at a company spend significant time evaluating

the flow of funds in the business and identifying potential problems.

Dheeraj Vaidya (2014), concluded that financial transaction definition refers to a

completed agreement between a buyer and a seller to exchange financial assets,

goods, or services for payment. Such a transaction changes the finances of two

organizations or individuals".

Whether a business is large or small, accounting is an integral aspect of

operations. It is the procedure and technique for logging, analyzing, condensing, and

extracting reports on a business's transactions. Accounting for a company's transactions

makes it simple and transparent to follow and comprehend its financial activities. It

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enables all stakeholders to quickly comprehend the company's transactions, cash flows,

and financial performance.

For the organization to plan and make decisions, it must be able to measure key

components of the business. Additionally, financial records must abide with government

regulations about tax filing and other matters. At various management levels, financial

records are necessary to manage and oversee business operations.

Kate Eby (2018), explains that making decisions — both large and small — is

critical to the success of a business. Decisions come from the need to solve a problem

or the need for a potential opportunity. Gathering the right amount of information and

input from key stakeholders is essential for making informed decisions. Following one of

the few accepted processes to collect intel and objectively weigh the pros and cons of

the data can help steer you away from making unsound decisions.

As follows: "The decision-making process involves identifying a goal, getting the

relevant and necessary information, and weighing the alternatives in order to make a

decision. The concept sounds simple, yet many people overlook some of the critical

stages and risks that occur when making decisions." (Kate Eby, 2018).

Records of financial accounting support decision-making at all organizational

levels. The financial information relevant to their area of operations is used by

management at all levels to make decisions. Finding the more cost-effective supplier

can be all that is required to make these judgments. These reports are used by

managers to increase the profitability and efficiency of the business. Using financial

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accounting information, important choices could be made like moving the company's

operations to a new site. Accurate reporting also makes it simpler for management to

prevent mismanagement and losses.

Accounting is how you get a clear picture of your financial position. It provides

information on your company's current assets and liabilities, your cash flow, whether

you're earning a profit or not, and which areas of your organization are genuinely

profitable.

This study is conducted in the context of the importance of accounting in all

types of business. The study aims to investigate how accounting helps businesses in

terms of managing their cash flow and how cash flow influences the business owners in

decision-making. This research is conducted in Urbiztondo, Pangasinan and involves a

sample of all types of business who use accounting for past records and review

transactions whenever necessary. The study findings are expected to contribute to the

business owners on the future.

C. Research Questions

The Research Questions are;

1. What is the significance of accounting in all types of businesses?

2. How does accounting help business owners manage their cash flow?

3. How does cash flow influence business owners in decision-making?

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D. Summary Description of Intervention and Research Methodology

Your financial records reflect the results of operations as well as the financial

position of your small business or corporation. They help you understand what’s going

on with your business financially. Not only will clean and up to date records help you

keep track of expenses, gross margin, and possible debt, but it helps you compare your

current data with the previous accounting records and allocate your budget

appropriately. (Dan Woods, 2019)

If you put a full stop to accounting, your books will no longer show a clear

picture of your company’s financial viability. Without accurate records, it can be difficult

(or nearly impossible) to track cash flow projections and statements. (Sanjeev Archak,

2020)

Managerial accounting assists in making appropriate business decisions. The

information provided by the managerial accountant is used to strategize business plans

for the benefit of the company and identity the areas where improvement is required.

(Blessy George, 2023)

Financial accounting is a statutory requirement for a business to maintain

financial records and compile financial statements. These statements are useful for

submission to authorities, financial institutions, management and shareholders. But,

financial information is also essential to monitor the business and drive business

decisions on a day to day basis.

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 Management accounting is the process of managing the financial information

that is related to the operational aspects of a business. It is vital for a business to have

an accurate and relevant management accounting system and reports so that the

organization can respond and make decisions that are based on the actual financial

metrics. It helps the managers study the actual financial results and implications and

results of their decisions.

In summary, the research proposal will examined the importance of accounting

in all types of business. An unorganised record can result in many problems that could

significantly affect the business, such as insufficient cash flow. But through accounting,

the business owners will be able to know the money that comes in and out to

determine the current financial status of the business. Therefore, you can set

achievable goals and strategies better with updated and accurate information.

Research Methodology

This research proposes to use descriptive qualitative method. Based on Sugiyono

(2013) who states that qualitative research is descriptive. It means that collected data

was in the form of words rather than number. In addition, Gay (2015) who said that

qualitative research is the collection, analysis, and interpretation of comprehensive

narrative and visual data in order to gain insights into a particular phenomenon. In

other hand, Bogdan & Biklen (2015) who said that qualitative research is a research

which investigates the quality of relationships, activities, situations, or

materials.Furthermore, the purpose of qualitative research focused on promoting a

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deep understanding of a particular phenomenon such, environment, a process, or even

belief.

In this case, the researchers can collect, analyze, and interpret the data and then

describe it. This method intended to describe everything related to the topic of the

research. Where, the researchers describe about the importance of accounting in all

types of business.

Survey Questions will be used by the researchers to the selected business

owners, financial managers or accountants as their respondents in Urbiztondo,

Pangasinan. The answers to these questions will provide the bases of hypothesis for

this study. The researchers will orderly arrange the questions and will carefully prepare

to answer problem.

II. Literature Review

REVIEW OF RELATED LITERATURE

A. FOREIGN LITERATURE

"The Greater China Australia Dialogue on Public Administration has held annual

workshops since 2011 on public administration themes of common interest to the

People’s Republic of China, Taiwan and Australia. This book presents and discusses a

selection of papers developed from the Dialogue’s fifth workshop held in late 2015

hosted by the National Taiwan University in Taipei. The theme, ‘Value for Money’,

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focused on budget and financial management reforms, including how different

nations account for the relative performance of their public sectors. Authors: A. S.

Podger2018)

Capital budgeting is one of the most important decisions faced by the financial

management of any organization (Batra & Verma, 2014). It is a planning mechanism

used by an organization to make evaluation decisions on how to allocate resources

among investment projects (Al-Mutairi et al., 2018) and assessing the investment

projects that will create benefits for periods of over one year and that will assist the

company to obtain revenues or reduce future costs (Khamees).

This investigation breaks new ground by examining an inventive monetary

approach (the utilisation of technology-based self-service banking, borrowing financial

literacy and budgeting financial literacy) that, if embraced by rural small and medium-

sized enterprises (SMEs), can enhance business performance. (Eugine T. Maziriri,

Miston Mapuranga, Nkosivile W. Madinga 2018).

Innovation processes are vehicles of growth and, therefore, require effective

management systems. These circumstances raise the question of how a particular

innovation process model influences the features of budgeting implementation at the

enterprise, (Alla cherep published Oct. 2020)

According to Penyak Y. (April 2018), One of the most promising ways to manage

financial flows of enterprises is increasingly called the budget method, or budgeting.

It should be borne in mind that under budgeting now is understood not only the

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planning of financial resources, but rather a complex process that seamlessly

combines both functions of planning and operational management of finances.

According to Paweł Perz (2018), The changes, which were implemented in recent

years in the scope of keeping records of the business activity conducted by

foundations and the related reporting, have resulted in partial harmonization of the

widely understood obligatory reporting. However, the implementation of facilitations

in this scope, above all in the form of simplified records of revenues and costs, results

in ambivalent attitudes. On the one hand, they are an opportunity for the smallest

foundations and those starting their business activity.

This thesis explores factors related to private investment in education in Iran. All

of the three empirical chapters pay particular attention to the very different findings

obtained when considering urban versus rural contexts and the implications this has

for gender in Iran. For the first two empirical chapters, we use data from the

Household Expenditures and Income Survey (HEIS), while for the last chapter, we

employ data from the Labour Force Survey (LFS). Household/parental educational

expenditure on children is one factor related to private investment in education, Izadi,

G. (2018).

Due to the problems with unregulated and unsustainable system of local public

finance, local self-governments in the Republic of Serbia are characterized by non-

transparent and inefficient use of budget funds which adversely affects the scope and

quality of public goods and services. Pointing to the mismanagement of public

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finances at the local level, as a possible solution to these problems, the paper

proposes the implementation of performance-based budgeting. The paper describes

the main characteristics of this budgeting model which is an important part of the

broader process of public sector reform, Nikodijević Marija (2018).

According to Nursini Nursini (January 2018), the number of transfer funds

managed by local governments has increased significantly but the decline of the poor

is quite slow. The implementation of pro poor budgeting depends on the extent to

which local governments formulate program planning and budgeting related to

poverty alleviation. This study uses descriptive analysis approach and contents

analysis on planning documents and local budgets to know the number of programs

and the amount of government spending related to poverty reduction in Bone District.

This book presents 20 peer-reviewed chapters on current aspects of derivatives

markets and derivative pricing. The contributions, written by leading researchers in

the field as well as experienced authors from the financial industry, present the state

of the art in: " Modeling counterparty credit risk: credit valuation adjustment, debit

valuation adjustment, funding valuation adjustment, and wrong way risk." Pricing and

hedging in fixed-income markets and multi-curve interest-rate modeling." Recent

developments concerning contingent convertible bonds, the measuring of basis

spreads, and the modeling of implied correlations. The recent financial crisis has cast

tremendous doubts on the classical view on derivative pricing. (Publisher:Springer,

Cham, Switzerland, 2016)

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 The University of North Georgia Press and Affordable Learning Georgia bring you

Accounting I. Well-written and straightforward, Principles of Financial Accounting is a

needed contribution to open source pedagogy in the business education world.

Written in order to directly meet the needs of her students, this textbook developed

from Dr. Christine Jonick's years of teaching and commitment to effective pedagogy.

(University of North Georgia Press, Dahlonega, Georgia, 2017)

Process and leadership principles are the most important principles in every

organization. Implementing or modifying new principles is mostly considered as a

strategic change, Budgets have always played a big role in controlling the business

performance of organizations. This paper emphasises the importance of making

strategic changes in budgeting processes. Recently, budgets as the result of the

budgeting process have become a subject of criticism. Budgeting as a concept of

controlling has made businesses less flexible. (Megatrend Revija, 2, 20180101, 141 -

2018).

The scientific article is devoted to the issues of budgeting system at industrial

enterprises. The problem of improving the budgeting system in the enterprises of the

corporate sector has always been a key issue for both government and business. In a

time of economic turmoil and post-crisis periods, this problem becomes even more

relevant. Methodological tools are analytical and economic methods of information

processing. (Authors: Yuzvovich Larisa, Korogodina Ekaterina, Azisova Lucia - 2018)

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 In this paper we provide evidence on the budgetary practice of 135 large firms

located in Spain. The results have allowed us to evaluate a wide range of weakness

attributed to the traditional budgeting approach, still called into question, as well as

to discern towards what emerging paradigm budget is aligned the practice analyzed.

Evidence shows that the budgetary approach used by the firms have managed to

resolve many of the weakness imputed to the traditional budgeting. At the same

time, we note that in the most of the cases studied these procedures are in line with

the conceptual ideas defended by the Better Budgeting. (Edilberto J. Rodríguez

Rivero - Dec. 2013)

B. LOCAL LITERATURE

Budgeting has been part of the daily lives of people. It exists anytime and

anywhere, others have enough budget while others do not. Expenses of people also

differ based on their status in life. Students, having their weekly allowance,

experience some struggles in proper budgeting. The purpose of this study is to assess

the effects of improper budgeting of allowance in the academic performance of Grade

12Accountancy, Business, and Management students. Using a qualitative method and

descriptive research design, this study focused on how improper budgeting affects

the academic performance of grade 12 ABM students. There were three academic

variables identified as affected by improper budgeting of allowance, such as the

students’ attendance, performance, and school-related expenses. (Ascendens Asia

Singapore – Bestlink College of the Philippines Journal of Multidisciplinary Research,

2019-04-01)

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 Business process outsourcing in the Philippines and Challenges for decent work

The International Labour Organization (ILO) is devoted to advancing opportunities for

women and men to obtain decent and productive work. It promotes rights at work,

decent employment opportunities, more effective social protection and improved

dialogue with respect to work-related issues. As countries in the Asia-Pacific region

navigate a sustainable recovery from the global economic crisis, the ILO Decent Work

Agenda and the Global Jobs Pact provide critical policy frameworks for strengthening

the foundation for a more inclusive and sustainable future. (ILO Asia-Pacific Working

Paper Series, 2016).

This business process outsourcing company provides services to business

owners, accounting firms and small enterprise partners. It has a total of fifty (50)

employees composed of both regular and probationary employees. It was established

in the year 2002 at Taguig City, Metro Manila. Useful recommendations of possible

procedures and programs may address company's Human Resource concern in its

early years. The researchers conducted an interview with the Operations Director to

gather information about the background, history and the existing policies of the

company. (Austero, A. O, Borromeo, D. P. Alvarez, Kinkito, G. M. D. ., Escasinas, J. C.

C. ., Marañan, Lajot, M. B. ., & Ignacio, SMRIEdr, J. E. A. 2019.)

In developing countries, micro and small enterprises (MSEs) comprise the largest

part of the industrial fabric – offering millions of people worldwide the chance to be

employed and earn livelihoods. However, empirical evidence suggests that a large

majority of MSEs never manage to upgrade significantly. Defining upgrading as

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“growth through innovation” and using the Philippines as a country case, this study

evaluates the constraints and success factors for Filipino-owned MSEs to upgrade.

(Aimée Hampel-Milagrosa 2014)

This study presents the current state of entrepreneurship education in the

Philippines. The status of entrepreneurship education is evaluated through the

analysis of entrepreneurship education curricula and practices in the Philippines and

to suggest policy measures in the promotion, development and creation, growth, and

sustainability of more entrepreneurial undertaking. Entrepreneurship education in the

Philippines is heavily focused on the development of entrepreneurs in terms of

encouraging start-ups. (DLSU Business & Economics Review 22 (2), 2013).

This research concentrates in the area of Management Accounting. To identify

the important management areas prioritize by today’s managers and to recognize the

up to date comprehensive contribution of academic scholars and researchers to

management accounting literature. This study is important to unite the interest of the

users and researchers on the management areas to support information needed by

today’s managers. (Joy Lynn Legaspi, LAP LAMBERT Academic Publishing, 2014).

The study aims to determine the level of performance of small and medium

enterprise businesses in using accounting system. This study utilized descriptive or

survey research design through distributing an adopted questionnaire among the 128

respondents. (Asia Pacific journal of academic research in business administration 1

(1), 48-55, 2015)

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 The paper studied the factors affecting SME competitiveness in terms of their

capacity to access, link, and upgrade as well as entrepreneurial characteristics and

the business environment. Using a survey of 480 randomly selected SMEs in Metro

Manila, Cavite, Laguna, Batangas, Rizal, and Quezon, the objectives of the study are

1) to determine the obstacles and enablers in day-to-day operations and to overall

success of SMEs; 2) to describe SME competitiveness in terms of entrepreneurial

characteristics and firm-level capacity to access resources, link with value chain

partners, and upgrade capabilities; and 3) to make recommendations on policy aimed

at promoting SME competitiveness. (AIM RSN PCC Working Paper 2018-03).

Earnings management involves the use of acceptable accounting rules and

procedures as well as circumventing business activities to achieve desired ends. In

the literature, earnings management through discretionary accruals has always been

associated with an opportunistic motive to mislead various stakeholders about a

business’ financial performance to the advantage of owners and managers. (Cynthia P

Cudia, Aeson Luiz C Dela Cruz 2018).

REVIEW OF RELATED STUDIES

A. FOREIGN STUDIES

According to Geng, X. and Kalargiros, M. (2022) the effect of affect in accounting

contexts has recently attracted interest, but numerous questions still remain. Given

that affect can significantly impact a variety of accounting judgments and decisions in

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theoretically different manners, the purpose of this synthesis is to understand the

state of extant accounting literature in affect and identify directions for future

research.

According to Susan Peter Teru (2019), there has been constant growth and

development in information technology which had brought the digital revolution in

our daily economic, social and cultural fields. This technological development changed

the methods and ways of carrying out tasks within the scope of accounting

transactions and activities through the use of electronic media. One of the digital

applications produced on this issue is E- accounting. E-accounting is a new

development in the field of accounting adopted at the international level. E-

accounting stands for electronic accounting with the characteristics of high speed,

accuracy and with an immediate result.

The purpose of the research is an investigation of different accounting software

products, their functions, and specific features to make easier choice among variety

of similar products and analysis of their pros and cons that can influence on

companies’ performance. Authors classified accounting software according to its

capabilities to serve the different managerial purposes. Because accounting software

contains hundreds, some of them even thousands of features, the grouping method

gave a possibility to assort similar models that might suit the company's specific

requirements – size, cost, customizing, formats, appointments, models, and

providers. Observation and comparing of data showed that the cost of accounting

programs is critical to making the right choice (Lesia Marushchak 2021).

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 According to Ali, Bayad Jamal and Anwar (april 2021) The study's aim was to

look into the different aspects of strategic competitiveness and how they affect

competitive advantage in the private sector in Iraq's Kurdistan region. The

researchers used four Strategic Competitiveness dimensions to assess the current

analysis (Competitive strategies, innovation culture, managerial ethics, and Innovative

Ideas). In order to interpret the current analysis, a quantitative methodology was

used. The technique or process that the researcher is willing to accept in selecting

objects for the sample is referred to as sample design.

Block chain technology is inherent in the importance of accounting property -

information in the database is reliable, truthful, regardless of the confidence of the

counterparty. Transaction occurs only if it has been approved by all participants. With

the help of network accounting can be translated into a secure, transparent for all

parties and easy to use format. The introduction of technology in accounting has the

following advantages: online transactions are high-speed and user-friendly; accounts

can be updated using smartphone apps; optical data recognition systems allow you to

automate the entire process, starting with the introduction of primary documents.

(Aleksy Kwilinski 2019)

In today’s world, accounting information system is an absolute tool in the hands

of managers striving to remain in a competitive advantage amidst the rapid

technological advancement, increased awareness and challenging demands from

customers and business owners. This study seeks to evaluate the effect of Accounting

Information System on Financial Performance of Firms, using a review of empirical

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literature approach. By means of an exploratory research design, the study concludes

that the biggest impact Information technology has made on accounting is the ability

of companies to develop and use computerized systems to track and record financial

transactions in facilitating management decision making, internal controls, and quality

of the financial report, (Gofwan, Hassan 2022).

This study looks into the current, and potential uses of Blockchain technology in

business, specifically in Accounting and in cybersecurity. We relate Blockchain uses to

current concerns within cybersecurity and accounting. We review the literature that

includes topics such as Big Data in Accounting, blockchain’s use in financial security

and cybersecurity, and its use in financial accounting though the use of ledger

technology and also as a system of tracking financial misconduct.

According to Mary C. Gentile Giving (2019), Voice to Values in Accounting is the

first book to explain the ethical dilemmas faced by accountants in their day-to-day

work and to provide clear guidance for accounting students and professionals in

navigating through these issues.

According to Richard Wiratama January 22, 2022 this paper reviews the positive

accounting theory. The article also discusses development in accounting theory and

research. The philosophical objective of positive accounting theory is to explain and

predict current accounting practice. Positive accounting theory seeks to understand

why accounting practices are employed by accountants in different circumstances and

by different firms. Three hypotheses in positive accounting theory: bonus plan, debt

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covenant and political cost. Criticisms of positive accounting theory methodology,

philosophy and economics and approach.

This study will discuss PAT as seen from several perspectives, including the

history of the rise of PAT, the shift from normative to positive approaches, then the

development of PAT, research on PAT and criticism of PAT. The paper also describes

the economic consequences related to the emergence of new accounting standards

which of course will affect the selection of the method of accounting by management,

this paper explores the importance of customer in strategic marketing in the values of

customer satisfaction and loyalty. (Amir Azlan Hamzah 2020).

Accounting information systems have an important role for the progress of a

company. Accounting information systems produce financial information. Financial

information is also referred to as financial statements. The accounting information

system collects data in the form of transactions that occur in companies such as

purchase transactions, sales transactions, cash disbursements transactions and cash

receipt transactions, The accounting information system functions to oversee all the

company's financial activities and collect and store data on the company's financial

activities or transactions. Source: Systematic Reviews in pharmacy. 2020, Vol. 11

Issue 12, p2054-2058. 5p. (Author(s): Meiryani; Lisanti, Yuliana; Heykal, Mohamad;

Wahyuningtias, Dianka).

According to Safa Eltayf Abdlame (2022), Environmental degradation has

become a major global issue that" much attention has been drawn to it from

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researchers, policymakers, lawmakers, environmental activists and the general public.

The current review presents a survey of the job of natural bookkeeping on feasible

advancement like methodology, estimating maintainable turn of events, and

assessing the effect of components on the utilization of ecological representing

supportable turn of events. The information of industrial companies was chosen to be

used in this study. Structural equation modelling (SEM) was used to analyze the

recorded data. The outcomes uncovered that familiarity with investors and senior

administration, business elements of the organizations, accentuation on submitting to

natural assurance rules, monetary, data and official obstructions, and business

benefits on ecological bookkeeping significantly affected creating natural representing

practical turn of events.

Business processes are undergoing a transformation through digitalization. In the

course of this development, “Industry 4.0” also has an impact on management

accounting and IT systems. By promising technical development and improvement of

management accounting processes, the conventional roles are challenged and the

introduction of new occupational fields is prognosticated. However, in theory and

practice, the impact of industry 4.0 (I4.0) on management accounting has not been

considered adequately so far. Against this background, the primary goal of this study

is to investigate the implications of I4.0 on management accounting by means of a

triangulation approach. The results of expert interviews, a literature review and an

analysis of job advertisements provide an overview on the development of

competencies of Management Accountants (MA) in Germany. The results have

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highlighted a closer cooperation of MA and Data Scientists. Additionally, there will be

a shift from traditional analysis towards statistical analysis methods (Authors Wadan

Rafi, Teuteberg Frank, Bensberg, Frank and Buscher, Gandalf January 09, 2019)

B. LOCAL STUDIES

According to Jamil C. Carandang and Rodiel C. Ferrer (2020), Environmental

accounting is an emerging topic of research around the globe, but little is known of

its practice and importance in the Philippines. This paper aims to determine the effect

of environmental accounting on firm profitability and firm value of 24 publicly-listed

mining and oil companies in the Philippines from 2012-2016. Panel regression was

utilized with cross-sectional and time-series data. Environmental accounting was

measured as environmental accounting disclosures and environmental costs

reporting. Profitability was measured as net profit margin and return on equity,

whereas firm value was measured as Tobin’s Q. Moderating variables used were

auditor-firm type, firm size, board size, number of years listed Philippine Stock

Exchange (PSE), and location. The major business implication concluded was that

environmental accounting disclosure has no significant effect on either profitability or

firm value, but when moderated by location, it has a significant effect on return on

equity. Environmental costs reporting, on the other hand, has a significant effect on

return on equity, but when moderated by firm size, board size, number of years listed

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in the PSE, and location has a significant effect net profit margin, return on equity,

and Tobin’s Q.

A budget is an economic tool for realizing and facilitating the vision of an

organization. If a budget is to serve as a useful tool, then it is essential that all

phases of budgeting are appropriately linked and managed [1]. This study made use

of the three types of research by methods: descriptive research to gather the profile

of respondents (size and type of business), budgeting practices (manager's

participation, linking budget development to strategy, rational allocation of resources,

flexibility continuous budget, and reduction of complexity and use of information

technology) and level of profitability; causal-comparative research to determine

differences between variables; and correlational research to determine the degree of

relationship between variables and for hypothesis testing. Primarily, the 331

respondents of the study were from the four-commercial centers in Isabela, broken

down as follows, Cauayan City (116), Ilagan City (58), Santiago City (121) and

Municipality of Roxas (36). Results of the study showed that test of difference in

respondents' budgeting practices regarding managers participation, reduction of

complexity and use of information technology significantly differed between small and

medium enterprises (Christian Philip A. Fortuna 2021).

According to Imee De Guzman Esguerra (2020), this study's main objective is to

describe farmers' profile that venture into agri-tourism business, analyze the status of

their business operation, determine the best practices and problems encountered by

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agri-tourism businesses in Central Luzon, which served as basis in crafting a

development plan.

According to Zach Gonzalvo, Ernie C. Avila (2019), this study was conducted for

the purpose of determining the level of financial literacy of microbusiness owners of

the Municipality of Ragay, Camarines Sur, Philippines The descriptive method of

research was utilized and the normative survey technique was used for gathering

data. 374 microbusiness owners were the respondents of this study.

This study examines the green purchase awareness of Philippine youth

consumers and its influence on green purchase intention and, ultimately, their green

purchase behaviour. The study used the theory of planned behaviour as a conceptual

framework. The research used an online five-point Liker scale questionnaire and

gathered data from accounting and business students in the Philippines; data were

collected from 923 usable respondents and then validated and analysed using

structural equation modelling, (Leah Manalang 2022).

According to Zach Gonzalvo, Ernie C. Avila (2019) this study was conducted for

the purpose of determining the level of financial literacy of microbusiness owners of

the Municipality of Ragay, Camarines Sur, Philippines The descriptive method of

research was utilized and the normative survey technique was used for gathering

data. 374 microbusiness owners were the respondents of this study. .

According to Lirag, Ma. Teresa B. (2022), A study was conducted to identify the

extent of use of ecommerce in the product promotion of SMEs, determine the factors

25
 affecting the ecommerce uptake of SMEs and recommend strategies to enhance

product promotion through ecommerce in Camarines Sur, Philippines. Ninety-six SMEs

were respondents in this study from the 5 districts in Camarines Sur, Philippines.

Survey-questionnaire was prepared, key informant surveys and focused group

discussion were conducted to gather first-hand data from respondents. Frequency,

percentages and t-test were used to analyze the data. Results of the study showed

that all respondents have access to the internet but only 4 have websites for the

promotion of their products. About half have no definite plans of establishing their

websites.

This study investigates the relationship between corporate diversification and

firm performance of Philippine publicly-listed non-financial firms, using the resource-

based view (RBV) view of the firm as its framework. The results show that the: (1)

III. RESEARCH METHODOLOGY

A. Sample

For qualitative studies, where the goal is to "reduce the chances of discovery

failure," a large sample size broadens the range of possible data and forms a better

picture for analysis. (DePaulo P, 2014). Sample size is also important for economic and

ethical reasons. "An under-sized study can be a waste of resources for not having the

capability to produce useful results, while an over-sized one uses more resources than

are necessary. In an experiment involving human or animal subjects, sample size is a

pivotal issue for ethical reasons. An under-sized experiment exposes the subjects to

26
potentially harmful treatments without advancing knowledge. In an over-sized

experiment, an unnecessary number of subjects are exposed to a potentially harmful

treatment, or are denied a potentially beneficial one (Lenth R, 2014).

A common strategy for sampling in qualitative research studies, purposive

sampling places participants in groups relevant to criteria that fits the research

question. Factors that affect sample size include available resources, study time, and

objectives. However, sample sizes are also determined by the concept of "theoretical

saturation," or "the point in data collection when new data no longer bring additional

insights to the research questions (Lenth R, 2014).

The participants of the study are consisted of ten (20) business owners, financial

managers or accountants in Urbiztondo, Pangasinan. The participants have experienced

and knowledge related to financial and managerial accounting practices. At present,

Pangasinan has a large population, thus, the researcher decided to select only the said

number of business owners in Urbiztondo randomly.

The researcher believed that these participants provided sufficient and essential

information to answer the questions raised in this study.

To ensure the data collected is relevant to this study, participants are selected

based on the following criteria;

• Business owner - who organizes and operates a business with an established

product and customer base.

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 • Financial manager - supervises important functions, such as monitoring cash

flow, determining profitability, managing expenses and producing accurate financial

information.

• Accountant - knowledgeable person who helps businesses make critical

financial decisions by collecting, tracking, and correcting the company's finances.

Triangulation Chart

Triangulation is a research method that involves using multiple sources of data

or multiple methods to validate and strengthen the findings and conclusions and

address potential biases or limitations in any single data source or method of a study.

The idea is that by using different methods, researchers can cross-check, enhance the

credibility and validate their findings, and gather information from multiple perspectives

or sources. In the context of qualitative research on determining the importance of

accounting in all types of business, a triangulation chart is use to identify the data

sources and data collection procedures:

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 RESEARCH QUESTION(S)

1. What is the significance of accounting in

all types of business?

2. How does accounting help the business

owners to manage their cash flow?

3. How does cash flow influence business

owners in decision-making?

DATA COLLECTION DATA SOURCES

• Analyses of financial and • Academic Research Articles

managerial accounting manuals
• Financial and Managerial
• Review of relevant academic Accounting Textbooks.
literature and research papers
• Survey with business
• Collection of data from Survey- owners/managers
Questionaires.
• Survey with financial accounting
• Direct observation of participants professionals
in a research study

C. Data sources

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Data sources are in-depth Survey with business owners about the importance of

accounting in all types of businesses, as well as the survey questionnaire given to the

target participants of the business organizations that use accounting to help them make

decisions within the business enterprises with the information necessary to make

effective choices. And if accurate balance sheets, income statements, profit-and-loss

statements, and cash flow reports can give managers up-to-date data that can help

them steer the business.

D. Data collection

The research environment, research subjects, data forms, and informed consent

are only a few of the considerations that the researcher make during the data collection

process.

The research context is the area or place where the phenomenon is being

studied. The business operations of Urbiztondo, Pangasinan, are the subject of this

study. In order to get the data they need for the study, the researcher also give priority

to businesses that used accounting to monitor their cash flow and help them in their

decision-making.

The researcher drafts an informed consent form. The researcher must then

complete a required phase in which they must address informed consent as one of

numerous ethical considerations. This phase is followed by the selection of the

appropriate subject, the observation site, and the data type and source for the study.

30
 Researcher explored the topic of consent with study participants. Notifying the

business owners that the researcher is doing research and obtaining their permission to

participate Additionally, the research adviser's consent has been sought. In order to

disclose to respondents that the researcher is conducting the study, the researcher

provided enough information about it for them to make an informed choice.

The researcher distributed the survey-questionnaires and Survey the

respondents after receiving consent in order to collect the essential information for the

aforementioned study.

E. Intervention

The intervention in this case included the significance of accounting in all

business types. Insufficient cash flow is just one of the numerous issues that an

unorganized record can cause, and these issues could have a big impact on the firm.

But by using accounting, business owners will be able to track the money coming in and

going out and assess the company's present financial situation. With current and

reliable information, you can better develop attainable goals and plans.

In order to gather sufficient and pertinent information to address research

objectivity, this study will use Survey questions with the chosen businesses as their

respondents in Urbiztondo, Pangasinan. The answers to the questions will serve as the

basis for this study's hypothesis. Survey questions will address the significance of

31
accounting in all types of businesses, and advice on how accounting helps the business

in their cash flow and decision-making will be provided as a result of this examination.

F. Data Collection

After randomly selecting the respondents to be Surveyed, a consent form will be

given to each of them before the survey and will serve as a document proving that they

have given their permission for them to be surveyed by the researchers. A brief

description of the study is printed in the consent form, which also includes the

confidentiality and disclosure of the respondents' names during and after the

completion of the study. After the consent form has been signed by the respondents,

the surveyor will inform them when the survey proper starts, as well as the recording.

The survey was structured into different section;

• the participant’s demographics

• the participant’s thoughts of accounting

• their experience regarding cash flow and decision-making in a business

When all the respondents have already been in Sur, the recorded answers

transcribed into texts for analyzation.

G. Data Analysis

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 When the answers of the respondents have already been transcribed into texts,

which was referred by Mthembu (2015) as raw data that need to be converted into

refined data for better analysis by the researcher, these would be translated into

English as part of data refinement. The refined data will be analyzed using thematic

analysis. Braun and Clarke (2016) state that thematic analysis is a foundational method

of analysis that needed to be defined and described to solidify its place in qualitative

research. It is a method for identifying, analyzing, organizing, describing, and reporting

themes found within a data set (Braun & Clarke, 2016).

The respondents' answers to each questions will be evaluated into codes and

these codes will be simplified into categories, and from the categories, the researchers

will generate a theme which will represent the answer that prevailed for each questions

raised in this study.

The researcher methods for analyzing and presenting the various types of data

they collected are shown below.

1.) Surveys: With experts who can offer deep insights into the distinction

between roles and how it affects risk management. Throughout analysis:

A. Record the Surveys, then transcribe them and group them according to

common themes or categories.

B. Do a thematic analysis to detect patterns, recurrent themes, and important

conclusions.

33
 C. Use quotation or paraphrased words to reinforce your points and add context.

2.) Relate Literature and Studies Review Data:

A. The data from the literature review should first be arranged and classified

according to relevant topics or concepts.

B. Use content analysis to ifind recurring themes, patterns, and arguments

across different sources.

C. Describe the main conclusions and points made in each piece of literature.

D. Find any gaps or contradictions in the literature to point up possible areas for

further study.

E. Use a citation management tool to keep track of your sources and ensure

appropriate referencing.

IV. FINDINGS

As in the previous chapters the findings begins with a Preamble, a paragraph describing

what will be covered or accomplished in this chapter.

According to Hamid Waqas Predicting financial distress remains an important

area of focus for researchers due to its vital importance for the firms and stakeholders

including investors, lenders, and participants of capital markets in general. Moreover,

the cost of financial distress is high, and it could result in business closure. In such a

situation, the financial distress model can serve as a whistle-blowing mechanism to help

34
the corporate managers to initiate remedial measures. Besides, the financial distress

model can help the firms to avoid potential bankruptcy.

This study is based on the business to avoid the problems in accounting in

business, and this study focused on importance for the firm and stakeholders including

the investors in the business because we cannot avoid bankruptcy in business.

This chapter represents an overview of the findings during the data collection process,

based on using a qualitative research method.

The following research questions guided the research study:

1. What is the significance of accounting in all types of businesses?

2. How does accounting help business owners manage their cash flow?

3. How does cash flow influence business owners in decision-making?

Responses to Qualified Participant Survey

QUESTIONS YES NO

1. Do you record the transactions of your business every 20

day?
2. Is the business important to you? 20

3. The most important thing for your business is to know the 20

cash flow and cash outflow?
4. You can use accounting to record transactions for your 20
business?
5. Is accounting a way to help your business grow? 20

35
 6. Have you ever experienced any problems while using 14 6
accounting in your business?
7. Is the role of accounting in your business to keep track of 20

your transactions?

8. Do you manage your cash flow and outflow for every 20

transaction in your business?

Based on the participants in my surveyed questionnaires, many of the business

owners can use accounting in their businesses because it helps them monitor the cash

flow and cash outflow of their businesses and the other participants can experience the

problem of using accounting; maybe they do not record the everyday cash flow and

outflow of their business. That’s why they experienced a problem using accounting

because if you cannot record the others transactions, you cannot perfect monitoring the

cash flow of their business, 30% of my participants can experienced the problems in

accounting using in their business.

V. DISCUSSION AND CONCLUSION

The purpose of this study was to examine the experiences of business owners

using accounting in their businesses. This study attempted to gauge the impact of

accounting in business by experiencing problems in their businesses using accounting.

36
 A qualitative research method was used to conduct the study to determine the

impact of business while using accounting. The researcher used one method, a survey,

to collect the data. The researcher analyzed the data based on the participant

responses and then subsequently categorized the data in correlation to the research

questions that guided the study.

The questions the researcher used to guide the study are as follows:

1. What is the significance of accounting in all types of businesses?

2. How does accounting help business owners manage their cash flow?

3. How does cash flow influence business owners in decision-making?

The researcher used a qualitative methodology to collect the data. The one form of

data collection use were;

A survey with eight questions to determine if participants were qualified to

participate in the study with answers to yes or no questions is enough to gather data,

and because of their experience as businesses, the participants can provide enough

information. This questionnaire that I used focused on the advantages of accounting

while using it in business.

DATA ANALYSIS

1. What is the significance of accounting in all types of businesses?

37
According to Adetayo Olaniy (2020) the study provided that strategic management

accounting is related to the provisions and use of accounting information by people in

the organization such as the management and the managers, to make business

decisions that would enhance competitive advantage and effective control of the firm's

activity. The major purpose of this study is to investigate the significance of the

strategic role of strategic management accounting in realizing the better performance of

transport businesses

This study is to provide decision-making and in the organization, the managers are very

important because they lead the staff in the organization to make better decisions. The

purpose of this study is to investigate the significance of the strategic role, and by doing

so, they can monitor the performance of the business.

According Hamid Waqas (2018) this study is intended to identify the predictors of

financial distress for the Pakistani firms. Variables used are the financial ratios

representing profitability, liquidity, leverage, and cash flows, as well as two important

market factors which are size and idiosyncratic standard deviation of each firm’s stock

returns.

It will represent profitability, liquidity, leverage, and cash flows, and it is very important

in a business to know the profit in your business. Because of cash flows, you can

monitor your cash flow and outflow.

38
The important thing in this study is to use accounting in the business because many of

the businesses cannot use accounting in their business, so the other businesses went

bankrupt.

2. How does accounting help business owners manage their cash flow?

According Yu p Soboleva (2018) The relevance of the research topic is determined by

the fact that in modern economic conditions the issue of cash flow formation and

management directly influences the operation, and in some cases, the existence of a

small and medium-sized business. The company needs a sufficient amount of cash for

timely repayment of its obligations. However, cash excess reduces its turnover and, like

shortage, negatively affects the performance of a company. The goal of this research is

to develop recommendations for monitoring the operations of small and medium-sized

businesses based on the analysis of their cash flows. To achieve this goal, the authors

set the following objectives: to study the essence of cash flows; to evaluate the

theoretical and practical methods of estimating cash flows in companies that are applied

in financial management; to develop recommendations for optimizing financial decisions

based on cash flow management.

Accounting can help businesses manage their cash flows and outflows, whether they're

small or big, because the cash flow in the business shows the performance of the

business, whether it's good or bad.

39
Schedvi (2017) study the impact of cash flow on investment and find that cash flow has a

positive effect on investment, and that the efficiency of cash flow is enhanced for

companies with limited financial resources.

3. How does cash flow influence business owners in decision-making?

According to Piotr w. Saluga (2020) knowledge of discount rates plays an important role

both in the discounted cash flow decision-making process and in the later phases of a

project’s lifetime. It is useful than both for management and cash-flow monitoring

purposes at operating stages. Investors putting money into power generation projects

expect an appropriate rate of return to compensate them for a minimum acceptable

real return available in the market (risk-free rate of interest) and the project’s specific

risk.

The cash flow can influence business owners by making a decision. It is very

important to manage the business and make a good cash flow of the business. If the

business owners can monitor their cash every day, they can manage it without thinking

of bankruptcy because many of the business owners cannot manage their business and

cannot make a good decision, especially about the cash flow of the business and During

the operating stages, it is helpful for both management and cash-flow monitoring.

The process of combining financial data to make it comprehensible to all parties

involved, including shareholders, is known as accounting. Recording and reporting a

company's financial transactions, financial performance, and cash flows is accounting's

primary objective.

40
 Financial statements are more reliable when they follow accounting standards.

The income statement, balance sheet, cash flow statement, and retained earnings

statement are among the financial statements. All shareholders and stakeholders are

able to evaluate a company's success thanks to standardized reporting. Financial

statements must be accurate, dependable, and transparent.

Recommendations for Further Research

The researcher make following recommendation for accounting in all types of business;

Financial statements

Give you a comprehensive understanding of the performance of your company. They

will assist you in making more informed choices about earnings, costs, assets, and

losses. It will be simple for you to see fresh projects that could expand your company

and to figure out how your money is leaving your firm.

Monitoring Cash flow

The quantity of money that enters and leaves your company in a given time frame is

measured as cash flow. Positive cash flow refers to having more money coming into

your company than going out of it. The opposite is true if your cash flow is negative.

Decision Making in Business

41
Accounting offers a language for decision-making, enabling companies to take well-

informed decisions grounded in precise and current financial data. Accounting may help

companies make financial decisions by helping them comprehend the risks and possible

repercussions of their choices.

Making a better business plan

A strong business plan offers guidance at every step of the startup and management of

your company. Your business plan will serve as a guide for goal prioritization as you

determine how to organize, manage, and expand your new company. It's a means to

consider and specify every important aspect of how your company will operate.

These are the recommendations that you can use in business. While using these

recommendations, you can manage your business in a good way because, while

presenting the financial statement in business, it is very important to know your

inventories and your expenses in your business, and cash flow can measure the outflow

and inflow of your cash in business. Decision-making is needed in business to make

good decisions, and we have a business plan to make a plan for your business to easily

grow.

Conclusion

For the purpose of this study, only the participants answered my survey. Many of their

businesses can use accounting to make a profit, and the financial statement can help

them monitor their outflow and inflow in their businesses and other business owners

42
that I surveyed can experience problems using accounting; they may not be able to

record all transactions. That's why they can experience the issue while using

accounting, and almost all of my participants can say accounting is the way to help

their business because accounting is a broad field and you can use it to know the taxes

of your business. This study can give you an idea of how to handle the business

because it provides decision-making, especially on the cash flow, and it involves all

businesses, not just big businesses, but small or big businesses and the information

from this study is available to business owners and accountants, and it can be utilized

by you as a business owner someday.

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