Accounting 211 Notes

School: Liberty University - Course: ACCOUNTING 211 - Subject: Accounting

Accounting is called the language of business because it communicates data that help people make better decisions External users Shareholders Lenders External auditors Nonmanagerial employers Regulators Internal users Purchasing managers Human resource managers Production managers Research and development managers Marketing managers Importance of Accounting Identifying- select transactions and events Recording- input, measure, and log Communicating- prepare, analyze, and interpret Opportunities in Accounting Financial- Preparation, Analysis, External auditing, regulatory, consulting, planning, criminal investigation Managerial- General accounting, cost accounting, budgeting, internal auditing, consulting, controller, treasurer, strategy Taxation- Preparation, planning, regulatory, investigations, consulting, enforcement, legal services, estate plans Accounting-related- Lenders, consultants, analysts, traders, directors, underwriters, planners, appraisers, FBI investigators, market researchers, systems designers, merger services, business valuation, forensic accounting, litigation support, entrepreneurs The majority of opportunities are in private accounting where employees work for businesses. Public accounting involves accounting services such as auditing, taxation, and advisory services. Artificial Intelligence (AI) and Data Analytics AI uses software and can be used to complete repetitive tasks such as entering invoices and transaction data Accountants are needed to help develop advanced AI systems and analyze reports and graphics Data analytics is a process of analyzing data to identify meaningful relations and trends Data visualization is a graphical presentation of data to help individuals make informed business decisions

Ethics For information to be useful, it must be trusted. This demands ethics in accounting. Ethics are beliefs that separate right from wrong. They are accepted standards of good and bad behavior 1.Identify ethical concerns - use ethics to recognize an ethical concern 2.Analyze options - consider all consequences 3.Make ethical decision - choose best option after weighing all consequences Fraud Triangle Three factors must exist for a person to commit fraud:opportunity, pressure, and rationalization Opportunity - envisions a way to commit fraud with low risk of getting caught Rationalization - fails to see the criminal nature of the fraud or justifies the action Pressure - must have some pressure to commit fraud, like unpaid bills Dealing with fraud The key to dealing with fraud is to focus on prevention 1.It is less expensive and more effective to prevent fraud from happening than it is to detect it 2.Both internal and external users rely on internal controls to reduce the likelihood of fraud 3.Internal controls are procedures set up to protect company property and equipment, ensure reliable accounting, promote efficiency, and encourage adherence to policies. Examples - good records, physical controls (locks, passwords, guards) and independent reviews