All about Accounting: its role in Business, Society and Environmental issues.

Accounting

“A firm’s income statement may be, likened to a bikini: what it reveals is interesting but what it conceals is vital.”
Burton G. Malkiel (click to tweet)

The history of accounting is closely linked to the development of human society and commerce. In fact, accounting has made significant contributions to both over the past five and a half thousand years. […] It is believed that many of the first examples of what we call ‘writing’ were actually records of transactions carried out more than 5,000 years ago. (A Brief History of the Practice of Accounting)

Barter Exchange @Google
Ancient Bookkeeper @Google

Since the early civilization where people started trading their goods, Accounting became a necessary field of activity in barter system. It is highly regarded field, because in order to manage and to set up a well balanced trade without currency, they need to keep track of the goods that have been traded, its worth compared to other goods, and the specified date they’ve been traded off.These important data were kept in books/note books, in other words, someone or some people were doing the bookkeeping which is a part of accounting. Today, Accounting is still a very important field, because in order to have a successful or well maintained business, it is essential to have accountants to keep track of the financial statements of the business. These financial statements show everything about the companies. Although financial statements are filled with numbers, for a well educated accountants and even the top management, they are able to analyse and interpret these numbers or summary into information which the public can understand.

But What Exactly is Accounting?

                  Nowadays, I believe that most people know about Accounting as it is an essential activity whether it is for business or personal purposes. Without Accounting, every activity that is linked to financial will not serve its purpose. For common people, Accounting means budgeting their money to pay their expenses, calculating taxes, and keeping track on how much they earn. However, Accounting is bigger than these. Accounting is everywhere!

“Accounting is the recording of financial transactions plus storing, sorting, retrieving, summarizing, and presenting the information in various reports and analyses.” (AccountingCoach)

Accounting is the language of business and, by extension, the language of all things financial. In the same way that our senses are needed to translate information about our surroundings into something understood by our brains, accountants are needed to translate the complexities of finance into summary numbers that the public can understand. click here

                       Accounting is used in every activity that we do, such as school activities, organizational activities, overall business activities (all industries), home activities (budgeting, income taxes, vacation), and many more. Even though a person doesn’t go to school to study accounting, they still learn it from their activities as everyone has and uses money currency and provides services.

What is its role in Business, Society and Environmental Issues?

                    Well, as I already mentioned earlier, Accounting is an essential tool for businessmen, non-profit organizations, and common people such as families. Accounting provides them financial statements about their company or financial status. Then, these financial statements are being analysed and interpreted by the accountants or themselves through reports, charts or any other tools used to explain their financial status. For example, a mother budgets their money according to their expenses and needs. By calculating their expenses and dividing the money according to these expenses in a note book or budget planner, the mother will be able to see if their income is enough or not enough to pay for their bills. Then, by interpreting the financial statements, she can gain information to help her decide in every problem they have. As such, if they don’t have enough money to pay the school, the mother and father can decide to work for more or seek another job, or to sacrifice an expense to support the education of their children. Therefore, Accounting is an essential tool that the businesses and societies can use to manage their resources, to find a profitable alternatives for a problem, and to guide them in their decision-making for the sake of their purposes.

                      Therefore, if Accounting is very important in Businesses and Societies as it helps them in finding solutions to their problems,and provides them with essential information that guides them in decision-making, it can also help us protect our environment. As a matter of fact, not long ago, the importance of the environment has come into effect. Businesses are now obligated to take into consideration the effects of their activities on the environment. So, once again, Accounting has widen its influence. Before, Accounting has been used as bookkeeping, but right now, there are seven(7) types of Accounting: Financial, Management, Governmental, Tax, Forensic, Project, and the newly formed Social Accounting.

Social Accounting, also known as Corporate Social Responsibility Reporting and Sustainability Accounting, refers to the process of reporting implications of an organization’s activities on its ecological and social environment. Social Accounting is primarily reported in the form of Environmental Reports accompanying the annual reports of companies. Social Accounting is still in the early stages of development and is considered to be a response to the growing environmental consciousness amongst the public at large.

To learn more about these 7 types of accounting, visit Accounting-Simplified.com @ http://accounting-simplified.com/financial/types-of-accounting.html

                    In conclusion, even though Accounting is an activity that is not directly linked to Environmental issues, still, Accounting has a big impact on our Environment. If Accounting is not well performed, it can ruin a business, society and every goal that we want to achieve that is linked with financial. However, if it is well performed, and we follow the rules and the idea that it suggests, not only we can achieve success, but also satisfaction, security, and sustainability.

Advertisements

Leave your Comment :)

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s