ASSIGNMENT 1 FRONT SHEET

Qualification BTEC Level 4 HND Diploma in Business

Unit number and title Unit 5: Accounting Principles (5038)

Submission date 9-10-2023 Date received (1st submission) 9-10-2023

Re-submission date 16-10-2023 Date received (2nd submission) 16-10-2023

Student name Le Thi Quynh Mai Student ID BH01116

Class MA06203 Assessor name Mrs. Hoang My Linh

Student declaration

I certify that the assignment submission is entirely my own work and I fully understand the consequences of plagiarism. I understand that
making a false declaration is a form of malpractice.

Student’s signature: Mai

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I. INTRODUCTION....................................................................................................................5

1.1. General Introduction to the Blog......................................................................................5

1.2. Main objectives and contents of the blog..........................................................................5

II. THE ROLE OF ACCOUNTING IN AN ORGANISATION..................................................5

2.1. Definition of Accounting..................................................................................................5

2.2. The general role of accounting in an organization............................................................6

2.3. Different types of accounting and the main users of accounting information..................6

2.3.1. Different types of accounting....................................................................................6

a, Project Accounting............................................................................................................8

b, Government Accounting...................................................................................................9

c, Forensic Accounting.........................................................................................................9

d, Tax Accounting..............................................................................................................10

e, Cost Accounting..............................................................................................................10

2.3.2. The main users of accounting information..............................................................10

2.4. Evaluating interrelationships of the accounting function and other functions................12

2.4.1. The relationship between accounting and marketing..............................................12

2.4.2. The relationship between accounting and finance...................................................13

2.4.3. The relationship between accounting and law.........................................................13

2.4.4. The relationship between accounting and management..........................................14

2.5. Career opportunities in Accounting................................................................................14

2.6. Required skills and competencies for accounting roles..................................................15

III. THE CONTEXT AND PURPOSE OF FINANCIAL AND MANAGEMENT

ACCOUNTING.............................................................................................................................16

3.1. The roles and importance of accounting as an information system................................16

3.2. Distinguish between IFRS and GAAP and principles as well as ethics in accounting...18

3.2.1. Distinguish between IFRS and GAAP....................................................................18

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 3.2.2. Ethics in Accounting................................................................................................20

3.3. Critically evaluate the role of accounting in informing decision-making......................21

3.3.1. For organizations.....................................................................................................21

3.3.2. For related parties....................................................................................................21

3.3.3. For society...............................................................................................................22

3.3.4. Example...................................................................................................................22

IV. CONCLUSION......................................................................................................................23

V. REFERENCES.......................................................................................................................23

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 I. INTRODUCTION
I.1. General Introduction to the Blog
Accounting is essential to a company's performance and financial stability in the fast-paced
commercial world of today. Welcome to our blog, "The Role of Accounting in Organizations,"
where we examine the numerous and crucial parts of accounting that promote growth, guide
strategic choices and provide firms the ability to expand. We intend to clarify accounting-related
difficulties through our blog, assisting you in approaching and using it properly. We invite you to
join us on this trip as we examine the crucial role accounting plays in an organization, regardless
of whether you are an existing client or are thinking about using our services. Stay tuned for
information, advice, and strategies to help you confidently navigate the financial world.

I.2. Main objectives and contents of the blog

Accounting is not just about calculating numbers, it is the language of business. It provides
a systematic way to record, analyze, and communicate financial information. This process is
important for decision-making, ensuring financial stability and compliance with legal and
regulatory requirements. The blog below helps us understand the types of accounting and the
main users of accounting information. Evaluate the relationship between the accounting function
and other functions to meet the needs of the organization. Accounting opens up many career
opportunities for new candidates with skills and abilities. Accounting is also considered an
information system. The blog clearly distinguishes between financial accounting and
management accounting in terms of purpose and scope, between IFRS and GAAP, and between
principles and ethics in accounting.

II. THE ROLE OF ACCOUNTING IN AN ORGANISATION

II.1. Definition of Accounting
“Accounting is the process of recording, summarizing, analyzing, and interpreting
financial transactions of an individual, business, or organization. It provides a systematic way to
track income, expenses, assets, and liabilities, enabling stakeholders to make informed financial
decisions” (P, 2023). The accountants might follow the Generally Accepted Accounting
Principles (GAAP) or the International Financial Reporting Standards (IFRS) principles (What is
Accounting? Definition of Accounting, Accounting Meaning - The Economic Times, 2023).

An analyst can gain a good picture of the company's financial status by reading the book of
accounts. Therefore, the book of accounts is required to determine the firm valuation for publicly
traded corporations.
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 II.2. The general role of accounting in an organization
Accounting plays a fundamental role in helping individuals and organizations manage their
finances, make informed decisions, and meet their financial reporting obligations.

Their major emphasis is assisting businesses with the tracking and analysis of financial
data. A successful company understands how to maximize revenues while minimizing
expenditures, and how to manage costs effectively. Accounting procedures can assist
organizations in monitoring financial flows, regulating debts to other persons and businesses,
and vice versa provided they are completed completely, swiftly, and precisely (Admin, 2022). A
complete picture of business and corporate profitability can be painted using all those processes
and reports.

In terms of accounting operations, they are in charge of gathering and processing

accounting data according to subjects as well as documenting, computing, and reporting existing
data, including the usage of assets, capital, processes, and outcomes of business and production
activities. The main person in charge of supplying accounting information and data following
legal requirements is also the accountant (Admin, 2022).

In particular, for enterprises and small firms, accountants are also the most dependable
business counselors. They comprehend the full cycle of business activities, from the initial stage
through the development process and till closing, thanks to the accounting profession. As a
result, the efforts of accounting specialists are always highly valued (Admin, 2022).

Accountants create financial statements and reports that are used to inform management,
investors, creditors, and regulators about the financial situation and operating results of a
company. Income statements, balance sheets, and cash flow statements are examples of common
financial statements.

II.3. Different types of accounting and the main users of accounting information
II.3.1. Different types of accounting
In businesses, there are often two types of accounting: Management Accounting and
Financial Accounting.

Features Financial Accounting Management Accounting

The nature of General purpose Specific purpose
the reports
produced

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 Level of detail Usually broad view Often very detailed
Regulations Usually subject to accounting Unregulated
regulation
Reporting Usually annually, semi-annually, or As short as required by managers
interval quarterly
Time orientation Almost always historical Often based on projected future
information and past information
Range and Financial information, great Financial and non-financial
quality of emphasis on objective, verifiable information often uses non-verifiable
information evidence information
The primary purpose of financial The primary purpose of management
accounting is to provide financial accounting is to provide information
information to external for internal decision-making within
stakeholders, such as investors, the organization. It assists
creditors, regulatory authorities, management in planning, controlling,
and the general public. These and making informed choices to
stakeholders use this information to achieve organizational goals.
make investment decisions, assess
the financial health of the company,
and ensure compliance with
regulatory requirements.
Purposes
Financial accounting focuses on Which looks at historical data,
recording past financial management accounting is forward-
transactions and summarizing them looking. It involves forecasting,
in financial statements. It provides budgeting, and scenario analysis to
an accurate representation of the help management plan for the future.
company's financial position and
performance over a specific period,
usually on an annual or quarterly
basis.
The objective of management
The objective of financial accounting is to provide timely,
accounting is to produce accurate relevant, and actionable information
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 and unbiased financial statements to support managerial decisions. It is
that reflect the true financial more flexible and tailored to the
condition of the organization. specific needs of management.
Financial accounting is used to The fact that management
show external stakeholders the accounting is centered on current and
financial situation of a corporation. upcoming corporate trends sets it
The preparation of annual and apart from other types of accounting.
quarterly financial statements, such Reports and information files on cost
as profit and loss statements, management, profit management,
Scope balance sheets, cash paycheck financial forecasting, resource
statements, and change of management, and other internal
ownership statements, is the main performance objectives are included
focus of financial accounting. in management accounting. It may
Depending on the nation, either be preferable to employ computation
IFRS or GAAP are used as the techniques and standards decided
international accounting standards upon by the firm itself because
for these reports in the method. information in management
accounting is frequently not revealed
to the company.

In addition to the above two types of accounting, there are several other types of
accounting: Project Accounting, Government Accounting, Forensic Accounting, Tax
Accounting, and Cost Accounting.

a, Project Accounting
“Project accounting is the accurate tracking of costs incurred through the lifespan of a
project. Such costs may include materials, labor, and capital equipment. They might occur at any
point during the project management cycle” (Indeed Career Guide, 2023).

Project accounting is crucial to keep track of how much money is spent over time because
it could assist a project owner in dividing resources across several initiatives. Understanding how
much a company spends on each step of a project, especially one with numerous phases, is
useful for project management. Before going on to the next stage of development, this can help
managers plan and identify the resources required for each phase.

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 Project Accounting has some of the following benefits: Budgetary compliance,
identification of cost-saving measures, better client relations, … (Indeed Editorial Team, 2023a).

b, Government Accounting
“Government accounting, also known as public sector accounting or governmental
accounting, refers to the specialized field of accounting that is applied in the context of
government entities and public sector organizations. It involves the recording, analysis, and
reporting of financial transactions, as well as the management of financial resources within
government agencies, municipalities, and other public institutions” (Public Management and
Governance, 2016).

Government accounting, as its name suggests, is a disciplined method for organizing,

compiling, recording, and deciphering all financial transactions involving government offices,
including their expenditures and receipts. Even the public funds entering government accounts
are tracked by it. All government institutions, including state, county, federal, municipal, and
entities with special purposes, use this style of accounting. Additionally, its six primary goals
include budgeting and resource allocation, independent audits, decision-making, accountability,
and legal compliance.

c, Forensic Accounting
“Forensic accounting utilizes accounting, auditing, and investigative skills to examine the
finances of an individual or business. Forensic accountants are CPAs that look for evidence of
crimes and commonly work for insurance companies, financial institutions, and law
enforcement agencies” (Hayes, 2023).

Expert witnesses in court cases frequently call forensic accountants as they study financial
documents and accounts that could be used as evidence. They might work on instances involving
embezzlement and fraud and describe the characteristics of a financial crime in court.

One of the accounting kinds used to evaluate any company's financial data and gather
potential criminal evidence is forensic accounting. To determine if a person or business has
engaged in financial misbehavior, such as fraud, forensic accountants use their auditing,
accounting, and investigative abilities. They examine the financial statements and documents
that may be used in court as proof if necessary. In a nutshell, it is an accounting style appropriate
only for court processes.

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d, Tax Accounting
“Tax accounting is a tool that companies use to understand their tax liability and avoid
penalties. It's common for financial professionals like accountants or financial advisors to use
this tool frequently. Learning about tax accounting can help you make more educated financial
decisions for a company” (Indeed Editorial Team, 2023b).

In addition to the financial statements, tax accounting primarily focuses on creating the
company's tax returns and overseeing the associated payments. Tax accounting differs from other
types of accounting in that it takes government credits, revenue, and deductions into account
when calculating a company's taxable income. Taxable income is always fluctuating and is
mostly based on the company's revenue. Simply said, it is the process of maintaining financial
records for a business to be used for future tax procedures. This procedure aids in monitoring
cash movement among clients, investors, or business owners.

e, Cost Accounting
“Cost accounting is a managerial accounting process that involves recording, analyzing,
and reporting a company's costs. Cost accounting is an internal process used only by a
company to identify ways to reduce spending” (Team, 2023).

Cost accounting is useful because it reveals where a business spends its cash, how much it
makes, and where cash is lost or wasted.

The entire cost structure of the business is analyzed and reported through cost accounting
work. Evaluating the costs incurred at each stage of production aids in capturing the company's
overall cost of production, which also includes fixed expenditures like the company's lease
expense. It is a useful process for figuring out how much the business is making, where the
money is coming from, and where it is going missing. It starts with an analysis, then reports, and
finally identifies areas where internal cost controls might be improved. Briefly put, this process
is crucial to the operational analysis for the management of any business.

II.3.2. The main users of accounting information

User group Decision
External Users
Determine the borrower's ability to repay debt, the number of assets and
Lenders obligations of the borrower, evidence of income, and economic situation...
before the borrower lends money to the economic organization (Muntasir,
2023).
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 They need information about the financial performance and position of
the business. For this reason, they use accounting information to look into
Owners/ the financial affairs of the business (Tamplin, 2023). Those numbers will
Shareholders tell them whether to continue investing and how profitable the company is
currently.
The government needs information to set tax policy, control business
activities, and calculate various indicators, such as GDP and national
Government income. At the same time, accounting information also helps them
allocate resources in the most scientific way (GeeksforGeeks, 2023).
“Customers have interest in the accounting information for assessing the
financial position of a business, especially, when they have a long-term
Customers involvement with, as it enables to maintain a steady source of business”
(MPhil-Fin, 2015b).
In corporate forms of business, ownership, and management are
frequently segregated. Investors often contribute capital, and management
runs the entity's operations. Both present and potential investors use the
Investment accounting data. This information is utilized by actual investors to
analysts understand how the management is using their cash and to predict the
future profitability and growth of the company. They determine whether
to boost or decrease their future investment based on this information.
Accounting data is used by prospective investors to assess a company's
suitability for their investment requirements (Javed, 2023).
Make use of publicly available accounting information to assess the level
Competitors of competition they face (Brown, 2019).
According to Peter Atrill and Eddie McLaney (2006), “Community
Community representatives know whether the business should expand its facilities or
representatives whether it should provide economic support to the business. Making these
decisions will affect the provision of jobs to the community, the use of
community resources, and the willingness to fund improve the
environment”.
External auditors examine the financial statements and the underlying
accounting records of businesses to form an audit opinion. Investors and
External auditors other stakeholders rely on the independent opinion of external auditors on
the accuracy of financial statements (11 users of accounting information,
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 2020).
Internal Users
Budgeting, forecasting, analysis & and making important financial
decisions. Investment decisions, identification of warning, and
Managers opportunity signals. Taking informed & and evaluated decisions.
Compliance with all statutory, regulatory, and any other external bodies
(Users of accounting information (Internal, external, examples), 2022).
Using accounting data is frequently an element of a job description for
employees working in the finance department. Creating and examining
various financial reports is part of this. Because it may affect their salary
and job security, employees are curious about the company's
performance. Many employees read through the accounting data in the
Employees annual report to comprehend the business of the organization. The growth
of employee stock options and stock programs in recent years, particularly
at startups, has increased interest among staff in corporate accounting
data. Additionally, prospective employees are curious about the financial
health of the company they hope to work for in the future (11 users of
accounting information, 2020).
Accounting information provides specific data and the company's
Sales staff development situation, from which sales staff can come up with
reasonable business strategies.
Inspecting the credibility of their customers by evaluating their repayment
Suppliers ability. Setting up a credit limit and payment terms with their customers
(Users of accounting information (Internal, external, examples), 2022).

II.4. Evaluating interrelationships of the accounting function and other functions

II.4.1. The relationship between accounting and marketing
According to Andrine Redsteer, when marketing is aligned with financial goals, there is an
accurate calculation of the impact of marketing on the company's profitability. Marketing and
accounting team represent two seemingly opposite realms of a company; but in reality, they’re
speaking to the necessary parties in the languages that their respective listeners understand.
When marketers communicate effectively with the accounting department, they work together to
capture the costs of campaigns and analyze them. While a marketing team might point to more

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conversions, the accounting team might point to an ROI that is not impressive enough to justify
the initial cost. If the dialogue is open, marketers might make a case for repeatability and
future ROI, for which accounting can find a specific budget and optimal timing for
funding (Admin and Admin, 2018).

When it comes to timing, the conversation between accounting and marketing is

key. Accounting has access to all department needs and scheduled investments. When a team has
a new idea or development in spring 2019, accounting can point the infeasibility due to another
department’s needs during that same time frame. By communicating the overlap, marketing
understands the lack of budget. Together, marketing and accounting can find a win down of
timing that works both for the marketing objective and for the company’s bank account (Admin
and Admin, 2018).

When accounting and marketing work together for the greater good of the company, they:
Monitor sales trends, open dialogue about the effectiveness of marketing and advertising efforts,
track marketing costs based on pre-set budgets, allocate resources more effectively, take on the
role of leading marketing activities that bring higher results.

II.4.2. The relationship between accounting and finance

Developing a budget or analyzing a company's working capital is another interaction
between corporate finance and accounting. Budgets are often prepared by finance officers to
present potential financial expenditures. Accountants prepare information that affects the current
budget at the end of each month. Finance staff ensure that the company sticks to its budget and
that all data is recorded accurately. Creating a new budget also requires the use of up-to-date
accounting data ('What Is the Relationship between Business Finance and Accounting?,' 2023).

II.4.3. The relationship between accounting and law

Trade and commerce are largely regulated by the laws of the country. Therefore,
accounting and law have a close relationship with each other. Partnership law, business law, tax
law, industrial law, cooperative law, and other related laws must be well understood by
accountants and accountants because the organization's finances are managed according to
clearly established principles and laws (MPhil-Fin, 2015a).

II.4.4. The relationship between accounting and management

The two fields of accounting and management are closely related to each other. Because
management relies solely on accounting for financial information to make choices. Accounting
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provides many types of financial data for project planning and execution within a company. As a
result, management can make confident judgments about project planning and execution (MPhil-
Fin, 2015a).

II.5. Career opportunities in Accounting

A career in accounting offers a variety of opportunities across numerous sectors and job
titles. Here are some of the professional options and paths open to those with accounting
knowledge and credentials.

Managerial Financial Taxation Accounting-related

•General accounting •Preparation •Preparation •Lenders
•Cost accounting •Analysis •Planning •Consultants
•Budgeting •Auditing •Regulatory •Analysts
•Internal auditing •Regulatory •Investigations •Traders
•Consulting •Consulting •Consulting •Directors
•Controller •Planning •Enforcement •Underwriters
•Treasurer •Criminal •Legal services •FBI investigators
•Strategy investigation •Estate plans •Market researchers
•Systems designers
•Merger services
•Business valuation
•Human services
•Planners
•Appraisers
•Litigation support
•Entrepreneurs

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 II.6. Required skills and competencies for accounting roles

Skill is specific learned abilities that you will require to perform a given job successfully.
Competence is knowledge and behaviors that lead you to be successful in a job (McNeill, 2022).

The ability to use diverse software and hardware devices and systems to carry out tasks
and address issues is referred to as having technology skills. Technology can help cost
accountants improve their communication, cost analysis, performance dashboard, and data
analysis skills. They must be knowledgeable with a variety of accounting programs, including
QuickBooks, SAP, Oracle, and Excel. In addition, they should brush up on current technologies
like big data, blockchain, artificial intelligence, and cloud computing (Accounting, 2023).

To recognize and successfully address financial difficulties, one must have strong
analytical and problem-solving abilities. Accounting leaders must possess management and
team-building abilities. Maintain knowledge and successfully lead your team through the digital
revolution.

The ability to effectively and appropriately express and exchange thoughts and information
is referred to as communication skills. Cost accountants must communicate with a variety of
parties, including management, staff, clients, suppliers, auditors, and regulatory bodies. They
need to communicate in a variety of ways, including verbally, in writing, visually, and digitally.
Additionally, they must modify their communication tone and style to fit the message's context,
audience, and goal. They must be persuasive, polite, straightforward, and succinct (Accounting,
2023).

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 III. THE CONTEXT AND PURPOSE OF FINANCIAL AND MANAGEMENT
ACCOUNTING
III.1. The roles and importance of accounting as an information system
“Accounting Information System is a software that a business uses in collecting, storing,
and processing financial data that are used for decision-making. It is a computer-based method to
track down accounting activity in conjunction with information technology resources. To
simplify, the Accounting Information System gives accurate data to the managers before making
any significant decisions that will either make or break their business” (Qa Admin, 2023).

Figure: Accounting Information System

When information and communication technologies are incorporated, accounting

information systems play a crucial part in the performance of the firm. As a result, it will
encourage the innovation of accounting techniques. Process management, operational tasks,
internal reporting, and external reporting are a few of the duties, in that order. It has become
crucial for accounting information systems to create data that is in line with the strategic
perspective of the majority of modern firms. One of the main functions of accounting
information systems is this. To produce information that can aid in making decisions about the
outside world, the accounts department will do more than just analyze internal operations. This
will be connected to the organization's and the competition's external environments (Fatima and
Khan, 2016).

Here are the roles of accounting as an information system:

Accounting is a methodical and well-organized way to keep track of financial transactions.

It keeps track of all financial transactions, including purchases, payments, and investments, to
produce a thorough financial history for the company (Adminnavee, 2023).

Accounting offers a standardized method of disseminating financial information to a

variety of stakeholders, such as creditors, employees, regulators, and investors. The organization
gains trust and confidence as a result of this transparency (FSgalaxy2, 2019).

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 Save costs and time for businesses to use, avoid small errors in the information storage
process, and limit possible financial losses (Admin, 2023).

Information system, in general, refers to the collection, storage, and dissemination of data
for planning, controlling, coordinating, analyzing, and making decisions. An AIS, on the other
hand, consists of all the associated parts that work together to gather information, such as raw
data or regular data, and convert it into financial data so that it can be reported to decision-
makers. The Management Information System is without a doubt the most crucial and traditional
of the current business systems. The notions of "management" and "information" are mutually
exclusive and demonstrate how information is necessary for the sensible execution of
management operations. The organizational culture, degree of strategic planning, and
information technology used by a particular corporation all have an impact on the accounting
information system that is developed there. When a company has a competent accounting
information system in place, it is feasible to get more accurate information about its financial
structures. In the process of overseeing an enterprise's operations, accounting data is crucial. The
world has undergone a thorough process of AIS implementation during the past ten years. Both
major industrial and small business organizations adopted these systems. Later, AIS installation
began in additional businesses and government organizations.

The survey conducted by the Institute of Management Accountants (IMA) indicates that
“work relating to accounting system was the single most important activity performed by a
corporate accountant” (Fatima and Khan, 2016). To capture crucial financial data that will be
used in the future, information systems must be deployed. Major organizations, particularly those
in the retail sector, will retain information on sales, profits, expenses, and many other things for
use in financial reports in the future. The recording will be done frequently throughout the day, if
not minute-by-minute with more intricate and detailed accounting software. This is crucial since,
in addition to being needed in day-to-day operations, it will also be required for the remainder of
the year's tax calculations. In the event of an audit or other potential financial concerns, a lot of
this data must also be kept on file for several years. Legal concerns might result in serious
complications and perhaps the demise of a business. Companies have a significantly higher
chance of surviving and succeeding if they organize and keep this data utilizing computerized
accounting information systems.

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 III.2. Distinguish between IFRS and GAAP and principles as well as ethics in
accounting
III.2.1. Distinguish between IFRS and GAAP
IFRS GAAP
“Refers to a globally accepted set “A collection of commonly-followed
of accounting and financial accounting rules and standards for
reporting guidelines for preparing financial reporting. The specifications of
and presenting financial statements. GAAP, which is the standard adopted by
It ensures uniformity in accounting the U.S. Securities and Exchange
practice that makes financial Commission (SEC), include definitions
Definition records comparable across different of concepts and principles, as well as
reporting entities worldwide. Over industry-specific rules. The purpose of
the years, it has emerged as the new GAAP is to ensure that financial
world standard in accounting” reporting is transparent and consistent
(Palmer, 2022) from one organization to another” (US
GAAP: Generally accepted accounting
principles, 2019)
Local vs. Is used in more than 110 countries Is only used in the United States.
Global around the world, including the EU
and many Asian and South
American countries.
Rules vs. Principles-based Rules-based
Principles
Inventory First In, First Out (FIFO) First In, First Out (FIFO)
Methods
Last In, First Out (LIFO)
Inventory Allow inventories to be written Allow inventories to be written down to
Write- down to market value. If the market market value. Reversal of earlier write-
Down value later increases, IFRS allows downs is prohibited.
Reversals the earlier write-down to be
reversed.
Fair Value Allows revaluation of the following Revaluation is prohibited except for
Revaluations assets to fair value if fair value can marketable securities.
be measured reliably: inventories,
18
 property, plant & and equipment,
intangible assets, and investments
in marketable securities.
Under IFRS, these same assets are GAAP requires that long-lived assets,
Fixed initially valued at cost, but can later such as buildings, furniture, and
Assets be revalued up or down to market equipment, be valued at historic cost and
value. depreciated appropriately.
Investment Includes the distinct category of Has no such separate category.
Property investment property.
Allows lessees to exclude leases for Has no such exception.
Lease low-valued assets.
Accounting Excludes leases of all intangible assets
Includes leases for some kinds of from the scope of the lease accounting
intangible assets. standard.

IFRS is less detailed than GAAP. Not being used globally.

Implementation costs for small GAAP tends to take a "one-size-fits-all"

businesses: The transition to IFRS approach rather than accounting for the
Threats for these businesses far outweighs immense diversity that is often seen
the benefits. between companies.
Capital markets and the standards Long wait times for new standards:
are not the same in different GAAP policy boards go through rigorous
countries. deliberation and an extensive process to
set new standards for the generally
accepted accounting principles.

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 III.2.2. Ethics in Accounting

Maintaining the public's faith in the accounting profession requires ethical compliance. The
AIA's Constitution, which includes a Code of Ethics, binds all of its members. Every AIA
member is required to abide by the following five principles under our Code of Ethics:

Integrity: Being clear and honest in all business and professional dealings is a sign of
integrity. Accountants must maintain their integrity by refraining from cooperating with
information they believe to be materially inaccurate, misleading, or deceptive by omission (The
Importance of Ethics in Accounting, 2022).

Objectivity: You must not allow bias, a conflict of interest, or the improper influence of
others to damage your professional or business judgment (Professional Ethics for Accountants |
AIA, no date).

Professional competence and due care: To guarantee that a client or employer obtains
competent professional services based on current changes in practice, legislation, and
procedures, a professional accountant has a continual duty to keep professional knowledge and
ability at the level required. When delivering professional services, a professional accountant
should perform diligently and in line with all applicable technical and professional standards
(Revised Code of Ethics - completed, 2005).

Confidentiality: Accountants have to safeguard the private data that their clients entrust
them with. They are not permitted to reveal them to third parties in violation of the law, for their
benefit, or without a valid reason. This is a crucial aspect of the ethics of professional accounting
(Kumar Srivastav, 2023).

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 Professional behavior: Compliance with rules and regulations is required by accounting
ethics for accountants and auditors. Any moral conundrum that might harm these professionals'
reputations or call into question their integrity should be avoided. They must also show respect
for their coworkers, customers, government, and even rival businesses (Basics of Accounting
Ethics | Hall Accounting Company, 2023).

III.3. Critically evaluate the role of accounting in informing decision-making

III.3.1. For organizations
An organization can better understand its profit and loss status and financial condition by
using accounting information. The organization can then decide how to best respond to the needs
of the moment.

State-by-state laws and regulations differ, but using the appropriate accounting systems
and procedures will help you make sure your company is operating following all applicable laws.
The accounting department will make sure that obligations, such as those related to sales tax,
value-added tax, income tax, pension funds, etc., are settled properly (Woods, 2019).

Managers frequently use accounting data as a major decision-making tool. This is evident
from the way accounting information is structured. Compared to information from other
specialist sectors, it is the source of information that is the most reliable, timely, and helpful.
Administrators must have a variety of options from which to choose that are reasonable.
Organizational decisions can either have immediate effects on the organization or they might be
strategic choices with long-term effects. Every choice is dependent on facts, and management
accounting provides a lot of that information. To make it easier for administrators to process, this
information can also be presented in the form of mathematical models, graphs, and charts (Role
and impact factor of the accounting information system of the corporate management, 2021).

III.3.2. For related parties

Union, governmental, regulatory, taxing, environmental, and other entities evaluate
whether the organization is conforming with applicable contracts, rules, laws, and public policies
and/or whether changes are needed (Muntasir, 2023a).

Potential and existing investors use financial statements to evaluate the company's
financial performance and decide whether to invest, hold, or sell their shares.

Lenders and creditors use financial information to assess a company's creditworthiness and
determine whether to extend credit or loans (Kosinski, 2023).

21
 III.3.3. For society
Accounting guarantees that businesses give the public transparent and accurate financial
information. This openness encourages responsibility.

To control enterprises, collect taxes, and formulate sound economic policy, governments
rely on accounting data.

Stable economic conditions are a result of good accounting processes. When financial data
is trustworthy, it will aid in risk identification and early prevention through the provision of
preventative actions (The Demand and Need for Transparency and Disclosure in Corporate
Governance, 2014).

Consumer protection may be aided by accounting information. Consumers can decide who
to engage as clients by assessing the financial stability of a business.

To help society track how businesses affect communities and the environment, modern
accounting me To help society track how businesses affect communities and the environment,
modern accounting methods also include environmental and social reporting methods also
include environmental and social reporting (Saylor Academy, 2023).

III.3.4. Example
Mr. Le Hoang Tung said, "In Vietcombank's performance, there is an essential contribution
and silence of the team of over 1,000 accounting and financial departments throughout the
system". The Board of Directors respectfully recognizes, appreciates, and joyfully commends the
financial institution's staff's actions, sense of responsibility, and efforts across the system. This
demonstrates the significance of accounting in a business or corporation.

The Finance and Accounting Division urged the Board of Directors and ALCO Committee
to manage interest rates flexibly and timely in response to market changes and balance capital -
utilizing Vietcombank's capital - thereby boosting the efficiency of Vietcombank's capital usage
(VietCombank, 2023). To carry out the Finance and Accounting Division's strategic objective,
which is to steadily improve the role of business associates by 2021, the division has
accompanied business units in promulgating several mechanisms on-time policy: customer
interest and charge exemptions and reductions; fee package policy; budget preferential interest
rates; spending on Covid prevention and business continuity plans (VietCombank, 2023).

22
 IV. CONCLUSION
The crucial significance of accounting in the contemporary corporate landscape is
highlighted in the blog post, "The Role of Accounting in an Organization." No matter the size or
sector, accounting is the foundation of every business, as we've discussed in this blog. It goes
beyond tax compliance and figure crunching; it is a dynamic instrument for wise choice and
long-term development.

Accounting is the compass that directs a corporation toward its goals, from financial
reports that give a broad overview of a company's performance to budgeting and forecasting that
direct strategic planning. It guarantees adherence to legal requirements and encourages
transparency, both of which are crucial for cultivating confidence among stakeholders.

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