I.

The role of accounting in an organization

1. Definition of accounting and general role of accounting in an organization

Accounting is the work of recording, collecting, processing and providing information about the
financial activities of an organization, an enterprise, a state agency, a private business
establishment... This is a department that plays an important role in the field of economic
management. From management at the scope of each unit, agency, enterprise to management at
the scope of the entire economy. Depending on each organizational structure as well as the field
of operation of the enterprise, the accounting department is divided into different components
such as: general accounting, management accounting, warehouse accounting, tax accounting,
accounts receivable accounting, etc (Tien Vo, 2015).

According to Nguyen Huong (2023), The accounting department acts as the lifeblood and center
of any business or organization. Accounting helps companies to develop in the direction of
proactive management and legality with state law. Accounting plays a great role in the process of
managing the revenue and expenditure of businesses and organizations. From there, business
owners and managers will have an overview of the financial situation, and the effectiveness of
business activities and determine what plans need to be made in the future. From tracking
payables and disbursement as a liability, accountants ensure that all expenses in business
operations are paid on time, avoiding problems with corporate bad debt. Accounting is also the
department that represents businesses in carrying out their legal responsibilities to state
authorities through tax payments. Accountants will make tax payments to government agencies
such as corporate taxes, unemployment taxes, social security and workers' compensation taxes,
personal income taxes of officials and employees, etc. .. The accounting department is
responsible for paying taxes on time so businesses can fulfill their tax payment obligations
before the law.

2. Different types of accounting

There are several different types of accounting that serve specific purposes in organizations.
Here are some main types:

Financial accounting: The basic goal of financial accounting is to keep track of, document, and
finally report on financial transactions through the creation of financial reports. Like
management accounting, financial accounting always focuses on historical performance. Instead,
financial accounting gives an accurate picture of a company's performance over a given period in
the form of financial statements. External stakeholders, such investors and financial institutions,
are given finished reports.

Management accounting: In enterprises all throughout the world, management accounting is a

type of accounting. Management accounting is made to give management the data they need to
make important company decisions. Information about management accounting is privately
shared with other employees.

Government accounting: Government accounting is managed by the Government Accounting

Standards Board (GASB), which, like GAAP, has created standards that monitor and report to all
levels of government. In contrast to financial accounting, which is subject to GAAP regulations.
Governmental organizations manage income and expenses using separate funds, which is the
primary distinction between financial accounting and government accounting.

Public accounting: Public accounting firms offer accounting services to a wide range of
customers, including service companies, manufacturers, retailers, NGOs, governmental bodies,
and private individuals. Public accounting places a strong emphasis on financial statement
preparation and analysis, audits, tax planning, and tax preparation.

Cost accounting: The specialty of cost accounting is to track the true expenses of business
activities. Cost accounting is primarily utilized internally in manufacturing settings, while it can
also be employed in service-based enterprises.

Forensic accounting: Accounting, auditing, and investigative methods are specifically

combined in forensic accounting. The financial operations of both individuals and companies are
examined using forensic accounting. Banks, law firms, police forces, and other institutions
frequently utilize it to investigate financial transactions and then provide the results in a
comprehensive report.

Tax accounting: Tax accounting, in contrast to other types of accounting governed by the FASB,
is governed by the Internal Revenue Code (IRC) and is meant to ensure compliance by
enterprises, nonprofit organizations, and individuals. When calculating and disclosing tax
liabilities for their clients, tax accountants collaborate with these organizations to ensure
accuracy (LuatVn, 2023).

Management accounting Financial accounting

Concept Management accounting is a system Financial accounting is the

that collects, processes and
recording, reflecting,
communicates information to internal
synthesizing data, and
business managers. From there, it helps
administrators make the right business preparing financial statements
decisions in the future, and at the same
to serve the needs of providing
time lays the foundation for systematic
business management, aiming for information about subjects
sustainable business development. outside businesses and
organizations such as:
shareholders, authorities
(taxation, inspectors...),
creditors, banks,etc. The
purpose is to serve macro
management needs.

Information Information users of management financial accounting is mainly

users accounting are members inside the outside. businesses such as:
business: Board of directors, owners, shareholders, customers,
managers, supervisors, etc lenders, suppliers and
governments (tax authorities,
financial management

agencies, etc).

Form of Information in management accounting Financial accounting

information is collected to serve the decision- information is mainly pure
 making function of managers and is accounting information,
often not available. collected from accounting
documents.

Information Management accounting information is Financial accounting must

characteristics not required to comply with general comply with information
accounting principles and standards; principles according to current
State regulations on management accounting standards and
accounting (if any) are for guidance regimes in each country, as well
only. as with international accounting
principles and standards
recognized by other countries.

Legality of the organization of management Financial accounting has a legal

accounting accounting work is internal, under the nature, simply understood as a
authority of each enterprise, to suit the system of books, records,
specific management characteristics, presentations and information
management requirements, conditions provision that must comply with
and management capabilities of the uniform regulations if it wants to
enterprise. each unit. be recognized.

Reporting Management accountants carry out Financial accounting reports are

period regular and shorter reporting periods prepared periodically, usually
than financial accountants, depending annually.
on corporate governance
requirements.

Purpose Management Accounting aims to Financial Accounting aims to

control the actual financial situation of record financial transactions in
the enterprise to make optimal accounts, facilitating the
decisions and solutions in the preparation of financial reports.
company's development strategy. It involves compiling data and
preparing financial reports to
 provide information to users.

Scope Management accounting includes both The scope of financial

financial and non-financial accounting focuses on
information. It not only focuses on providing historical financial
financial data but also integrates non- information, standardized and
financial factors to provide a transparent, to external
comprehensive view and support stakeholders to support
effective management decisions. The economic decision making and
scope of management accounting is ensure legal compliance .
flexible and depends on the specific
Financial accounting mainly
needs of the business. Management
deals with financial transactions
accounting uses both historical
that happened in the past. This
information and future information.
information provides an
Financial reports in management
overview of the financial
accounting may include revenue
situation of the business during
forecasts, projected costs, and profit
the ended accounting periods.
and loss analysis.
Financial accounting is mainly
financial, the main goal of
financial accounting is to
provide accurate and reliable
information about the financial
situation and operating results
of an enterprise to external
stakeholders. Including
(Business performance report,
balance sheet, cash flow
statement, statement of changes
in equity.).
In short, Financial Accounting focuses on financial reporting and information related to
company’s financial situation, while Management Accounting assists management in making
decisions and optimizing operations.

3. Career opportunities in accounting

Accountant: An accountant's main responsibility is to monitor and document all of a company's

or organization's financial activities. Financial statement preparation and reconciliation are
additional services provided by accountants.

Management Accounting: The main goals of management accounting are the analysis of
financial data and the provision of management information to aid in the firm's strategic
decisions. They oversee keeping track of, studying, and forecasting the financial health of the
business.

Tax Accountant: Calculating, filing, and making sure that all applicable tax laws are followed
are tasks that fall under the purview of tax accountants. They frequently collaborate with tax
authorities to guarantee accurate and on-time tax payment.

Risk management accounting: Accountants that specialize in risk management evaluate and
control a company's financial risks. To develop strategies to reduce and control financial risks,
they examine financial data and information.
Auditing Accounting: Auditing accountants assess the accuracy and dependability of financial
data within a business. To verify adherence to accounting rules and standards, they inspect
accounting systems and procedures.

International Accounting: The management of financial information for businesses with global
operations is emphasized in international accounting. They must be aware of, apply, and ensure
adherence to global accounting standards.

Consulting accountants: To offer clients accounting consulting services, accountants can

operate alone or as part of a consulting firm. Financial planning, analysis, and regulatory
guidance in accounting are a few of the services offered.

Only a few of the accounting industry's career options are listed here. Numerous opportunities
for career growth and promotion are provided by the field's size and diversity.

4. Fundamental principles of ethics in accounting

Integrity:

Honesty and straightforwardness are always the top criteria in the work of an accountant. They
not only ensure the accuracy of the report but also ensure that the information is error-free.
Professional accountants and auditors are not allowed to attach their names to unreliable
information. If they find that a report or information has been given carelessly, they must take the
necessary steps to stop being associated with it.

Objectivity:

Professional accountants and auditors must not allow any conflict of interest to influence their
professional decisions and activities. During work, situations may arise that may affect
objectivity. However, it is the accountant's role to recognize and avoid such situations. It may not
be feasible to identify and cover all these situations, but ensuring integrity and independence in
decision-making is the responsibility of every industry professional.

Professional capacity and prudence:

Professional capacity: It is necessary to maintain professional knowledge and skills at the

necessary level to ensure the provision of quality professional services to customers or business
owners. A careful and technically sound approach is indispensable when accountants and
auditors provide professional activities or services. To ensure the provision of quality
professional services, professional accountants and auditors should exercise reasonable judgment
when applying professional knowledge and skills in the performance of services. Professional
competence is not only achieved once but also needs to be maintained and developed. This
ensures they stay up to date with the latest advances in their field and can meet the changing
requirements of the business environment.

Respectfulness: Must be meticulous, careful, and thorough in every aspect of your work. This
includes verifying information, checking documents and figures, and ensuring the accuracy and
independence of financial reports and documents. Responsible for training and supervising
employees under their management. When necessary, communicate honestly and clearly to
customers, business owners, or partners about limitations and problems that may occur in their
services or operations.

Security:

In the accounting and auditing profession, information security is a basic and indispensable
principle. We must ensure that information obtained from professional and business relationships
is protected and is not disclosed to third parties without consent from the appropriate party. This
principle not only applies at work but must also maintain information security even in non-work
environments. We need to be alert to the risk of unintentional disclosure of information. We must
keep this information confidential and not use it for our own or any third party's personal benefit.
In addition, we must also maintain information security within the accounting, and auditing
business or organization where we work. This ensures that sensitive information is not leaked
and is only accessed by those with access rights.

Professional status:

In the role of professional accountants and auditors, compliance with relevant laws and
regulations is a fundamental requirement that cannot be overlooked. In addition, great care must
be taken not to take any action that could discredit the profession. To become a professional
accountant or auditor, honesty and straightforwardness are dispensable principles. We need to
make sure we provide accurate information. With honesty, straightforwardness, and compliance
with laws and regulations, we build trust and confidence from customers and the business
community. This not only facilitates personal success but also contributes to the sustainable
development of the accounting and auditing industry (Minh, 2023).

5. Required skills and competences for accounting roles.

Accounting is a crucial function in any business, responsible for recording, analyzing, and
synthesizing financial information. To excel in this field, professionals need a blend of
specialized knowledge and essential soft skills (Pace, 2024).

 Advanced Skills:

Advanced skills are fundamental for accountants, encompassing a thorough understanding of

accounting principles and standards, and the ability to accurately record, summarize, and analyze
financial data. Accountants must be adept at ensuring the precision and validity of financial
reports. Compliance with legal regulations, such as tax laws and accounting rules, is also crucial.
Advanced skills enable accountants to apply these regulations effectively, avoid legal pitfalls,
and mitigate risks. By leveraging their expertise, accountants can identify trends, strengths, and
weaknesses in business operations, thus aiding management in making informed decisions.

 Office Computer Skills:

Proficiency in office software like Excel, Word, and PowerPoint is essential for accounting tasks
such as data entry, reporting, and analysis. Additionally, familiarity with accounting software
helps in recording transactions, generating financial reports, and managing assets efficiently.
Skills in using data analysis tools like Microsoft Access, as well as communication tools such as
email and cloud storage, enhance accountants' ability to collaborate and share information
effectively within the organization.

 Meticulousness and Precision:

In accounting, attention to detail and accuracy are critical. Accountants must meticulously check
and verify data, documents, and financial information to prevent and detect errors. Accurate
financial reporting, which adheres to accounting standards and regulations, is crucial for
reflecting the true financial status of a company. Precision in collecting, recording, and
calculating transactions ensures reliable financial reports that support sound business decisions
and effective management.

 Understanding Taxes:

A strong grasp of tax regulations is vital for accountants. It enables them to comply with tax
laws, complete tax reporting accurately and promptly, and optimize tax strategies for businesses.
Knowledge of tax principles affects how financial transactions are recorded and reported.
Accountants need to ensure accurate tax reporting, apply tax regulations effectively, and
maintain good relationships with tax authorities by providing precise and comprehensive
information.

 Professional Ethics:

Accountants handle sensitive financial information, making professional ethics a cornerstone of

the profession. Ethical standards include confidentiality, adherence to legal and accounting
standards, and integrity in financial reporting. Upholding these principles builds trust and ensures
transparency, protecting the interests of stakeholders such as shareholders, investors, and
customers.

 Problem-Solving Skills:

Accountants must be adept at addressing issues and errors that arise in their work. Problem-
solving skills involve identifying the root cause of issues, analyzing contributing factors, and
devising effective solutions. These skills help in resolving accounting problems and preventing
errors, ensuring the accuracy and reliability of financial information.

 Analytical and Synthesis Skills:

Accountants frequently deal with large volumes of data. Analytical skills enable them to interpret
and analyze financial information systematically, revealing key insights that aid in decision-
making. The ability to analyze financial data, identify trends, and forecast future performance
helps guide strategic planning and improvement measures. Synthesis skills allow accountants to
present complex data in clear, comprehensive reports for stakeholders.

 Time Management Skills:

Accountants often face tight deadlines for tasks such as book closings, tax reports, and financial
statements. Effective time management involves planning and prioritizing tasks to ensure timely
completion. Good time management enhances work efficiency, allows for thorough data
verification, and helps reduce stress by maintaining a clear work schedule.

Skills to Withstand Pressure: The ability to work under pressure is important for accountants,
who may face stressful situations or complex problems. Skills to withstand pressure help
maintain focus and accuracy, allowing accountants to handle challenging scenarios effectively
and find solutions under difficult conditions.

II. The importance of accounting as an information system

1. Definition

Accounting is essential to a corporation since it is a system of financial data. Various viewpoints

exist regarding the role and importance of accounting as an information system. An accounting
information system is a system that a business uses to collect, store, manage, process, retrieve,
and report its financial data. This data can then be used by accountants, consultants, business
analysts, managers, chief financial officers (CFOs), auditors, regulators, and tax agencies
(Fontinelle, 2024).

2. The role and importance of accounting as an information system.

Accounting serves as the backbone of any organization, providing crucial financial information
that enables effective decision-making. According to Simerp (2022), here are some key roles and
importance of accounting as an information system.

First, accountants compile and document financial information. Accounting professionals record
financial transactions to create a managed and structured financial database. Accountants
organize information into accounts to help organizations track their financial activities and assets
over time. This is important for the business to be able to monitor financial patterns and changes
throughout its operations. Accounting as an information system also plays a critical role in
providing financial data. Accountants produce financial statements like capital, asset, liability,
and cash flow statements as well as income, asset, and income statements. These reports provide
information on how a company operates. Making important decisions will be made easier with
the use of this information for management, shareholders, and other stakeholders. Through
financial reporting, a business can also meet the requirements for financial reporting set forth by
stakeholders such as regulators, shareholders, and banks.

When making decisions, the accounting system is essential. Information and statistics from
accounting are available to help in company decision-making. Financial data is used by investors
and management to assess financial performance, choose investments, grow, reduce expenses,
and manage risk. Accountants provide essential metrics and information for making informed
judgments by analyzing financial data. For example, management can assess business
performance and decide whether to modify or enhance business strategy by looking at financial
indicators such as profitability ratios, cash ratios, and profitability ratios.

In addition, accountants are essential in making sure that regulations and accounting standards
are followed. Applying accounting methods and principles guarantees the accuracy, fairness, and
dependability of financial data. Accounting guarantees the implementation of national or
international accounting standards, accurate information recording, and adherence to regulatory
requirements. In addition to making sure the business runs in a legal environment and
minimizing the risks associated with regulatory compliance, this is crucial for improving the
company's credibility and reputation.

All things considered, three of the most significant problems that contemporary private
enterprises face have been partially addressed by the accounting information system. First and
foremost, to help businesses become more competitive; second, to help businesses make
decisions; and third, to help businesses succeed by supporting professional and commercial
operations.

3. The main users of accounting information.

Accounting data is used by the public, the government and its agencies, management, staff,
lenders, suppliers, and other creditors in the business sector. These users make use of accounting
data based on their requirements:
Internal users of accounting information system:

Owners: Owners are the people who provide capital for the business. They need information
about the financial performance and position of the business. For this reason, they use accounting
information to investigate the financial affairs of the business.
Management: To assess the short-term and long-term solvency of a company, management needs
information about the company's operations. Management needs accounting information to make
several decisions, such as determining selling prices and other strategies. It is also necessary to
compare performance with similar businesses in the industry and to plan for the future in terms
of expansion, contraction, etc.

Employees: The stability and profitability of the employer are topics of concern to both the
workforce and the groups that act as their representatives. In addition, they are looking for
information that will help them assess whether the company can afford to pay wages, provide
retirement benefits, and create job prospects.

External Users of Accounting Information:

The public: The public is affected by businesses in many ways. For example, businesses can
have a significant positive impact on the economy of their community through the employment
of local people and the use of their suppliers. Financial reporting can help the public by
informing them of recent changes and trends that have affected the success and scope of the
business.

The government and its agencies: The allocation of resources and, therefore, the operations of
businesses are a concern of the government and its agencies. They also need information to set
tax policies, control business operations, and calculate various indicators, such as GDP and
National Income.

Creditors: To decide whether to extend, maintain, or limit the flow of credit to a particular
company, short-term and long-term creditors need to know whether the money owed to them will
be paid when it comes due. To determine whether the principal and accrued interest will be paid
when it comes due and whether to extend, maintain, or limit the flow of credit to a company,
short-term and long-term creditors need information that helps them understand the solvency of
the business.

Current investors: To evaluate the pros and cons of their investments and decide whether to buy,
hold, or sell the stock, current investors need accounting information.
Potential investors: To evaluate the strengths of the business and decide whether to buy the stock,
potential investors also need accounting information.

Customers: Customers are curious about the future of an organization, especially if they rely on
it or have a long-term relationship with it. Accounting information increases or decreases a
company's goodwill with its customers.

Tax authorities: To determine a company's tax liability, tax authorities need information. To
compare the information on tax returns with supporting accounting documents, tax authorities
occasionally audit a company's returns. Accounting records of suppliers and customers are also
cross-checked by tax authorities to detect suspected tax evasion.

Auditors: Auditors examine financial statements and underlying accounting records to issue audit
opinions. Investors and other interested parties rely on external auditors' independent
assessments of the accuracy of financial records.

References
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