Accounting paper 503

Topics: Business ethics, Financial statements, Ethics Pages: 6 (975 words) Published: December 23, 2014
Running head: ACCOUNTING PAPER

Accounting Paper: Introduction to Accounting and Finance
Anthony S. Smith
October 30, 2006
Instructor: Terry Dunning
University of Phoenix
Executive Summary
The Accounting Paper addresses an audience of MBA students interested in starting a coffee shop business; the students are entry-level accounting and finance connoisseurs’ thus in need of financial consultation. The Accounting paper discusses the nature of financial statements and managerial reports as well as explains the use of financial accounting information make use of to make informed and ethical business decisions. The principal components of the Financial Statements are the balance sheet; income statement; statement of changes in shareholders' equity; statement of cash flows; and footnotes. Management reporting is an essential component to the day-to-day life of most organizations. The process of financial analysis is based on the budgeting and accounting reports and leads to the creation of managerial reports that feed into the organization's overall strategic decision-making . Well-designed financial and managerial reports should tell a story about the organization's performance, making it easier for managers to interpret financial results on their own. The role of ethics within organizations is moving away from the job of one leader to a distributed set of competencies owned collectively by the leadership team. A company must look at where the ethics function sits inside the organization, and integrate corporate responsibility throughout in other words, an ethical basis to the operation of finance is not a constraint or limitation on financial agents, but rather the condition that the financial system can exist at all. Beginning with the first financial statement, reviewing balance sheets to the depth of managerial reports, accuracy and ethical responsibility should all be intertwined for the overall success of an organization.

Introduction
The Accounting Paper addresses an audience of MBA students interested in starting a coffee shop business; the students are entry-level accounting and finance connoisseurs’ thus in need of financial consultation. The Accounting paper discusses the nature of financial statements and managerial reports as well as explains the use of financial accounting information make use of to make informed and ethical business decisions. Financial Statements

The principal components of the Financial Statements are the balance sheet; income statement; statement of changes in shareholders' equity; statement of cash flows; and footnotes.  The balance sheet portrays the financial strength of the company by showing what the company owns and what it owes on a certain date.  The balance sheet can be thought of as a snapshot photograph since it reports on financial position as of the end of the year.  The income statement, on the other hand, is like a motion picture since it reports on how the company performed during the year and shows whether operations have resulted in a profit or loss.  The statement of changes in shareholders' equity reconciles the activity in the equity section of the balance sheet from year to year.  Common changes in equity result from company profits or losses, dividends, or stock issuances.  The statement of cash flows reports on the movement of cash by the company for the year.  The footnotes provide more detailed information on the balance sheet and income statement. Lee, K (2006)

Managerial Reporting
Management reporting is an essential component to the day-to-day life of most organizations. The process of financial analysis is based on the budgeting and accounting reports and leads to the creation of managerial reports that feed into the organization's overall strategic decision-making. Well-designed financial and managerial reports should tell a story about the organization's performance, making it easier for managers to interpret...

References: Drew, M (2006) Understanding and Using Financial Management Systems to Make Decisions: Retrieved October 27, 2006 from the web site: http://erc.msh.org/mainpage.cfm?file=2.2.2l.htm&module=finance&language=English
Dobson, J (2006) Finance Ethics: the rationality of virtue: Retrieved from the web site: http://www.pust.edu/oikonomia/pages/genn/recensione.htm
Lee, K (2006) How to read financial statements: Retrieved October 27, 2006 from the web site: http://instruction.bus.wisc.edu/corecourses/Cmcarpenter/readings/reading_statements.htm
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