The Account is the art of conveying financial information about a business unit for shareholders and managers etc. Accountancy has call ‘business language’. In Hindi, the words ‘लेखा विधि’ (account law) and ‘लेखाकर्म’ (accounting) are also useful in ‘Accountancy’. Accounting Content, Financial, and Accountancy!
Also learn, Accountancy is a branch of mathematical science that is useful in finding out the reasons for success and failure in business. The principles of accountancy are applicable to business units on three divisions of practical arts, namely, accounting, bookkeeping, and auditing.
As Well as the definition “Accountancy refers to the art of writing business practices in a scientific manner and classifying articles and preparing summaries and interpreting the results.”
The functioning of Accountancy is to provide quantitative information regarding economic units, which are basically financially inadequate. Which is useful in taking financial decision-making, accountancy, identifying, and measuring. Analyzing information relevant to an economic event of an organization There is a process for doing and collecting. Which is used to prompt users of this information.
Operating cash flow (OCF) is the cash a business generates through routine operating activities, such as service delivery, marketing, hiring, and payroll, over a specified period. OFC represents a company’s ability to make money in the short and long term. Focusing on operating cash flow metrics helps businesses understand whether they can continue to grow and expand their business. OCF is also important for assessing overall organizational performance and financial health.
Here are the articles to explain, What is operating cash flow? type and importance
For any business to generate income, it must maintain a positive operating cash flow daily as it is directly related to net income. Cash flow management software helps companies and accounting teams manage money coming in and going out. It can also forecast future cash flows using historical financial data as a reference point.
Type of cash flow
Cash flow measures how much money is moving in and out of a company. A business considers valuable when it can generate positive cash flow or have more inflows than outflows.
Operating Cash Flow: Cash collected from regular business operations, including sales of goods, rent, wages, overhead, etc.
Investing cash flows: The funds used to purchase capital assets and securities such as stocks, bonds, and related holdings are investing cash flows. Cash flow into the company comes primarily from interest and dividends paid on these holdings.
Financing cash flows: Cash generated from the capital, external investments, and loans are financing cash flows. It also includes amounts recovered from debt and equity and additional corporate payments.
Free Cash Flow (FCF): The money left over after a business pays its operating expenses (such as salaries and taxes) is called free cash flow. Companies can spend their FCF however they want. Operating free cash flow often provides great insight for investors when reviewing business plans and making investment decisions based on the company’s financial efficiency.
The importance of operating cash flow
OCF is a major component of any financial analysis as it demonstrates the sustainability and financial stability of a business. Since operating cash flow takes into account day-to-day activities, it is necessary to determine whether current transactions are profitable.
OCF is an integral part of a company’s earnings assessment. It focuses on cash items that can help determine whether a business will need outside funding or investment shortly.
If an organization generates significant operating cash flow but reports a lower net income value, this implies an increase in the number of fixed assets and accelerated depreciation throughout the transaction.
Operating cash flow is important for the following stakeholders to make sound business decisions:
Financial Analysts: OCF is interested in analysts because it indicates whether a company is financially stable and profitable.
Investors: OCF helps investors decide whether a business is worth their capital and offers them a good return on their investment.
Lenders: Financial institutions such as banks, loan unions, and credit unions evaluate OCF values to determine an organization’s creditworthiness and financial responsibility for lending.
How to Present Operating Cash Flow
They are usually the first part of the financial statements, reported under the statement of cash flows, and include investing and financing cash flows. There are two ways of describing operating cash flow.
Indirect method:
The indirect method first adjusts net income at the bottom of the income statement to the cash basis. Net income needs to adjust because most businesses report on an accrual basis, which means there are small financial gains over time.
Non-cash items such as depreciation, amortization, accounts receivable (AR) and accounts payable (AP) add to arrive at the cash figure. When a company raises an AR increase, revenue generates but cash has not yet been received. In this case, the AR value must subtract from net income to understand the true cash impact on the business.
Likewise, an increase in AP indicates that expenses incurred have not been repaid. This results in the AP amount being added to net income to determine the actual cash impact.
Direct Method:
The direct method expresses operating cash flow and starts by recording cash-based transactions and tracking them during the accounting period.
When using the direct method to display the OCF value, the company still needs to separately perform the indirect method of operating cash flow to reconcile funds to obtain absolute cash figures.
Items included when presenting OCF by the direct method:
employee salary
Vendors and Vendor Payments
cash collected from customers
Interest Income and Dividends
Income tax and related interest payments
How to Calculate Operating Cash Flow
Reading cash flow and income statements can be challenging without knowing how to calculate the different metrics. Financial analysts can measure how a business conducts cash-based transactions by calculating operating cash flow.
While the simplest form of calculating OCF is Gross Revenue Operating Expenses, the formula may vary from business to business. Every organization has different non-cash items, changes in assets, and financial liabilities. Regardless of how OCF calculates, all items on the income statement and balance sheet must consider.
Calculate the change in operating cash flow:
OCF = Net Income + Non-Cash Expenses – Increased Working Capital
OCF = Net Income + Depreciation + Stock-Based Compensation + Deferred Taxes + Other Non-Cash Items – Increased AR – Increased Inventory + Increased AP + Increased Accruals + Increased Deferred Revenue
The operating cash flow ratio is a measure of whether a company can use the cash it generates to pay its current liabilities. It helps in assessing the short-term liquidity of a business with a transparent view of the company’s total revenue.
OCF Ratio = Operating Cash Flow / Current Liabilities
Operating Cash Flow Example
Let us take a simple example to better understand cash flow from operations. A small business collects $50,000 in cash from its customers. It spent $2,500 on marketing, skills training, and advertising. Assume its current office space depreciates by $1,000 in the same fiscal year, while taxes are $12,500.
Net income = $50,000 – $2,500 – $1,000 – $12,500
Net Income = $34,000
OCF = Net Income + Depreciation
OCF = $34,000 + $1,000
So OCF – $35,000.
Operating cash flow vs. net income vs. cash earnings per share
Several financial indicators help assess the economic performance of a business. But two common metrics that stand often confused with OCF are net income and cash earnings per share (cash earnings per share).
Operating cash flow takes into account the amount of cash generated from normal business activities. It is part of the cash flow statement and calculates on an accrual basis.
Net income is gross income from sales, including investments and excluding expenses. The main difference between OCF and net income is the way a company recognizes revenue over a certain period and matches expenses to that revenue.
Both OCF and net income may be higher or lower depending on the type of financial principle and when it measures.
Cash earnings per share is a measure of cash flow based on the number of shares outstanding. Cash EPS indicates operational stability and helps to compare business and financial trends in the market.
What is operating cash flow? type and importance; Photo by Tima Miroshnichenko from Pexels.
The Influence of Accounting Information System on Financial Accounting Function. Today’s society is a society with the rapid development of the economy and technology. At this time, the development of informatization is very fast.
Here are the articles to explain, What is an accounting information system? on Financial Accounting Function!
The accounting information system, which is the basis of national economic informatization and the core of enterprise informatization, has also existed widely used. However, accounting informatization is not simulating the previous accounting functions. It is more to provide decision-makers with the required data. Because accounting informatization has its uniqueness, it has a certain impact on the previous accounting functions.
Traditional accounting functions and the characteristics of accounting
In the past accounting work, there are two main functions, namely reflection and supervision. The so-called reflection function, specifically, means that the accounting workers are comprehensive. Accurately reflect the accounting information according to the accounting regulations and with the help of specific measures. The supervision function mainly refers to supervising whether various economic matters carry out by relevant laws and regulations.
At the same time, it has other functions, such as controlling economic activities, forecasting the company’s development prospects, etc. However, due to the current accounting measures and the defects of related auxiliary tools, many functions cannot perform. Under the background of accounting and accounting in the past, whether it is a manual mode or computerized mode. The task of workers is to set up various types of accounts according to accounting elements. Carry out accounting records according to work activities, and then obtain relevant vouchers and accounting. account information.
The difference between them is that the manual mode mainly relies on the abacus and other equipment to carry out work. But during the computerization period, most of the tools used are computers. The processing of information does not require manpower. The advantage is that it saves time and manpower. In other words, we rely on computers to perform tasks that were previously done manually. Such as keeping accounts and so on.
The characteristics of accounting under the environment of accounting information
After the implementation of information management, the financial and accounting information system at this time is a very comprehensive system with a relatively fast processing speed. It can stand reasonably connected with the business process and can ensure that the information stands processed the first time.
(1) Integration of information systems inside and outside the enterprise organization
With the help of information technology and current advanced communication technology, the management system combines accounting and production systems. The accounting information system, through the close connection of sales and production systems, has significantly broadened the work area of accounting. Internal and external accounting information, including suppliers and customers, organize organically in real-time.
(2) Business processing high automate
For a unit, after its business organization has reviewed and recorded the department documents, the system will generate the vouchers by itself according to the characteristics of the business, and transmit them to the general system as soon as possible. After auditing, the accounting workers can use the system’s auditing function to check the information again, and the system will process accounts from time to time, generate different types of accounts, process business with the help of templates, and automatically generate reports.
(3) Real-time reporting of accounting information
Under the background of informatization, various accounting data can process by the system. At this time, as an accountant, you can reasonably process accounting information according to the needs of the unit, and provide managers with various required materials, so that they can better To ensure that managers can know the operation mode of the unit the first time and better provide the real materials and data needed for the unit leaders to make decisions.
The impact of accounting informatization on traditional accounting functions
After the implementation of informatization, the accounting work has ushered in a new development situation. In this period of its formation and development, it has had a significant impact on traditional accounting work. At this time, the accounting function has changed, and various business activities have also begun to change. Traditional accounting, when formulating the system, stands mainly determined by combining the characteristics of accounting matters.
The information-based accounting work, when formulating the system, stands mainly determined by combining various types of data. Through informatization, we can reasonably disperse or comprehensively process information. At this time, we can ensure a high degree of information sharing and can provide financial and accounting data. At any time to ensure that the entire stage of information from acquisition to use can adapt to current control regulations.
(1) Influence Response Functions
Under the background of the current era, the response function of accounting is embodied in the use of information systems to reasonably optimize the content of information, such as information clarification and accounting, etc. It also covers. With the help of the automatic screening function of information, the incorrect information removes and the correct information saves. Which ensures the high accuracy of the information data, which invisibly lays a solid foundation for the information optimization work;
At the same time, the system can obtain the required vouchers by itself, and after the voucher verification and bookkeeping. It can generate the various account data we need by itself. Its response function and accounting function are not the same. Under the current background, information confirmation is the most critical content in the entire work task.
(2) Impact management functions
In the information age, because the collection and processing of financial and accounting information are highly automated, and its real-time characteristics are very obvious, then accounting workers can get away from tedious work and pay more attention to and Put their energy into other management activities, you don’t need to put a lot of energy and physical strength into tedious transactional activities as in the past.
For example, at this time, accounting workers can devote more energy to participating in the structural innovation work of the unit, and can also assist managers to formulate a control system and conduct performance evaluations. In addition, accountants can also focus on analyzing the information needs of users, and formulate rules for information recording and storage based on this.
The accounting information system processes the information according to predetermined procedures and rules and can transmit the data to the corresponding users. Combined with the specific situation of the user’s response, further determine the user’s demand for information. Then better carry out the next information processing work. Therefore, the management function of accounting begins to show at this time.
(3) Impact on the accounting control function
Under the current information system, because the feedback ability of accounting has been significantly improved, its control function has also begun to attract people’s attention at this time, reflecting an increasingly important existence value, and it can more effectively strengthen the enterprise’s Internal management and participation in business decision-making, thereby strengthening the overall competitiveness of the unit.
The basis of accounting control has gone beyond the scope of financial accounting theory and management accounting theory, and the basis of its control has been extended to modern economic control theory, such as system theory, information theory, cybernetics, decision theory, and so on. Focusing on business management and decision-making, it should also be clear in giving full play to the role of accounting control: “effective control must be scientific and systematic control; systematic control must be the control of grasping and optimizing information; optimized information must control through scientific and systematic methods.” Obtained.”
At the same time, the guiding ideology of modern accounting control is to implement comprehensive control, that is to say, when controlling, the past, present, and future should link together, and the state of things before they happened, the state of things in progress and the follow-up state, and the micro-mesh and macro-control are to link together.
Conclusion
In current years, our country’s economy has grown rapidly. At this time, various industries have also ushered in a new development situation. This invisibly promotes the innovation of accounting work. Under the background of this rapid development, the significance of accounting work has been more clearly reflected. And the related functions have also been significantly expanded compared with the past. The implementation of the informatization system in the accounting system has a lot of influence on traditional accounting work.
As accounting workers, we must look at accounting theory from a new perspective, and actively explore new theoretical knowledge. And change our understanding of the development of the times. Only in this way can we ensure the smooth development of financial and accounting work. Give full play to its due value and significance, and make better contributions to the development of the country.
The Influence of Accounting Information System on Financial Accounting Functions; Photo by Philip Strong on Unsplash.
A brief analysis of the accounting processing cycle of value-added tax deduction tax return essay. To be able to effectively implement the purpose of tax reduction and fee reduction and reduce. The pressure on the capital cost of enterprises, the State Administration of Taxation issued relevant documents. The accounting processing cycle of value-added tax retained tax returns in the year. Clarifying the calculation method of value-added tax retained tax returns for enterprises, applicant conditions, etc. To provide an effective basis for the implementation of value-added tax retained tax returns. However, when the accounting processing cycle of the actual value-added tax deduction. And the tax return of the enterprise stands affected by various factors. It is prone to various risk problems and accounting processing problems.
Here are the articles to explain, the accounting processing cycle of value-added tax deduction tax return essay.
Based on this, the following will be a brief discussion, analyzing the accounting treatment methods. And common risk issues under different conditions of value-added tax retention and tax return. Put forward suggestions for common risk prevention measures to strengthen risk prevention. And control of value-added tax retention and tax return processing.
Keywords:
value-added tax;
retention tax return;
deduction tax return;
accounting processing;
accounting processing cycle;
risk prevention
The pilot implementation of value-added tax retention. The tax returns can allow enterprises to enjoy the tax reduction and fee reduction policy. With the help of the implementation of value-added tax retention and tax return. It can effectively alleviate the cost pressure on enterprises and enable them to make full use of their capital. Since value-added tax retention and tax return is a new business. The relevant documents do not put forward clear requirements for the accounting processing of value-added tax retention and tax return.
Therefore, it is easy to hide risks during the processing process, which affects the effect of the accounting processing cycle. Therefore, when enterprises are piloting the work of value-added tax retention and tax return. They should pay more attention to the accounting treatment of value-added tax retention. Tax return and the prevention of risk issues.
The main precautions for a value-added tax deduction and tax return
(1) Clarify the concept of incremental tax deduction
Due to the coexistence of multiple value-added tax rates in our country. There are certain differences in the applicable tax rates between enterprises. The tax inversion may occur in the accounting process of value-added tax deduction and tax return. Therefore, to be able to carry out efficient accounting processing of value-added tax deductions and tax returns. The concept of incremental tax deductions must first clarify. And the accounting processing cycle must carry out according to the requirements of the tax return.
Before an enterprise conducts the processing of value-added tax retention and tax return, general value-added tax taxpayers and professional processing agencies can understand the relevant notification documents issued by the State Administration of Taxation, correctly understand the concept of incremental tax retention and tax deduction, and carry out accounting processing cycle and value-added tax retention and tax return operations by the relevant notification documents of the State Administration of Taxation, to reduce the probability of tax risks and failure to process applications in the accounting processing cycle process of value-added tax retention and tax return and ensure the orderly advancement of value-added tax retention and tax return work.
(2) Pay attention to the conditions for applicants for tax returns with tax credits
The value-added tax retention tax return has certain requirements for the applicant’s credit evaluation and violations of laws and regulations. Therefore, when processing the application for a value-added tax retention tax return. We must pay attention to the analysis of the applicant’s conditions to ensure that the applicant’s conditions meet the requirements. Judging from the documents issued by the State Administration of Taxation. There are strict requirements and regulations on the conditions for the tax return of the retained tax credit for general value-added tax taxpayers.
Only taxpayers with a credit rating of C or above allow applying for the tax return of the retained tax credit. And general value-added tax taxpayers must also ensure that they have not committed illegal and illegal tax operations. Within 36 months of applying for the tax return of the retained tax credit. And their application for the tax return of the retained tax credit will approve and enjoy the value-added tax return policy. Suppose the tax credit rating and tax behavior of the general value-added tax taxpayer meet the application requirements when applying for a tax return. But the subsequent tax credit rating drops, and the application conditions cannot meet.
In that case, the tax authority will not recover the tax return. In addition, due to the coexistence of multiple tax policies in our country. There can be different tax treatment plans for the same tax situation. Therefore, when taxpayers apply for value-added tax retention and tax return. They must pay attention to whether taxpayers have also enjoyed other tax preferential policies. And properly handle the application for value-added tax retention and tax return.
(3) Calculate the return of the incremental tax credit
When the value-added tax retains for a tax return, the tax amount can calculate scientifically to avoid tax risks. And ensure the implementation of the purpose of the tax reduction and fee reduction policy. The calculation of the tax return amount of the incremental retained tax credit can obtain by multiplying the three data of the incremental retained tax credit. The proportion of input, and the tax return rate that ordinary value-added tax taxpayers can enjoy. Judging from the research on relevant national tax policies, the tax return rate that ordinary taxpayers of value-added tax can enjoy is 60%. While taxpayers of advanced manufacturing can enjoy a 100% tax return rate.
Therefore, when calculating the value-added tax deduction tax return amount, we should pay attention to the analysis of the taxpayer’s industry, distinguish whether the taxpayer belongs to a general taxpayer or an advanced manufacturing taxpayer, determine the tax return rate that it can enjoy, and then scientifically calculate the amount of tax return that the taxpayer should receive based on the actual situation and related policies.
(4) Other precautions for value-added tax retention and tax return
In addition to the above common precautions for the processing of value-added tax retention and tax return. There will be various situations in the accounting processing cycle process of value-added tax retention and tax return. If you don’t pay attention to it, it will affect the accounting processing cycle results and create tax risks. Therefore, when processing the value-added tax retention tax return, it is necessary to combine relevant policy documents and pay attention to the processing requirements of the value-added tax retention tax return to process the value-added tax retention tax return application scientifically.
Accounting processing cycle of value-added tax deduction and tax return
(1) Accounting processing and analysis of the tax deduction amount retained by ordinary taxpayers at the end of the period
The main accounting processing cycle situations encountered by general taxpayers in the value-added tax deduction and tax return stand divided into five common processing situations, such as the processing of the tax deduction at the end of the period, the processing of the tax deduction for the relocation of the business location, the processing of the tax deduction for asset reorganization, the processing of the tax deduction during the liquidation period, and the processing of the tax deduction for the tax payable.
In the process of accounting for the tax deduction at the end of the value-added tax period for general taxpayers, the “Interim Regulations on Value-added Tax” indicate that the tax payable obtain after subtracting the input tax amount from the current sales tax amount of the general taxpayer. If in the calculation process of the tax payable by ordinary taxpayers, the current sales tax amount is not enough to deduct. The remaining tax amount can carry forward and deduct in the next processing process.
For example
For a general tax-paying company, the taxpayer’s outstanding value-added tax account credit balance before June 1, 2022, was 120,000 yuan, and the purchase price of the business occurred in June was 4 million yuan, of which the value-added tax was 680,000 yuan, the price of the product sold was 2 million yuan, and the current sales tax was 340,000 yuan. During the processing of value-added tax deduction and tax return, since the amount of tax deduction generated after June cannot offset the amount of tax owed before, the current sales tax amount of 340,000 yuan is the value-added tax deduction at the end of the month. There is no need to transfer it to the unpaid value-added tax for processing, and it can stand directly retained until the next month for the deduction.
(2) Accounting treatment of the tax deduction for the relocation of the business location of the general taxpayer
In the process of processing the value-added tax deduction and tax return for ordinary taxpayers, the problem of changes in the taxpayer’s business location will also encounter. It learns from the relevant announcement of the State Taxation Bureau that when the business location of ordinary taxpayers changes, after the industrial and commercial department has registered the change, if the competent tax authority changes, it is necessary to do a good job of cancellation and re-registration of the business location. At the same time, ordinary taxpayers can continue to deduct the amount of input tax that has not stood deducted before the tax stood canceled after re-registration.
For example
A company’s previous business location was in Area B of City A. Due to the company’s business development, it moved to Area C of City A for production. Before the relocation, the company had 150,000 input taxes that had not stood deducted. After the company has completed the tax cancellation and re-registration, the newly relocated tax authority in Area C confirms the amount of input tax that has not stood deducted and it is correct, the company can continue to use the 150,000 input tax that has not stood deducted for the deduction.
(3) Analysis of the accounting treatment of the tax deduction for the reorganization of assets of general taxpayers
The relevant announcement of the State Administration of Taxation stipulates that after the general taxpayer undergoes asset reorganization, transfers all assets and liabilities to the new general taxpayer, and performs tax cancellation and re-registration by the announcement, the amount of input tax that has not stood deducted before the asset reorganization can still carry forward to the new general taxpayer for the deduction.
For example
Company A and Company B are both ordinary taxpayers. When Company A restructures its assets and transfers all assets and liabilities to Company B, Company A still retains 200,000 value-added tax credits that have not stood deducted. During the tax cancellation process, Company A does not need to re-transfer this part of the tax amount, and Company B only needs to declare and deduct 200,000 TAX credits by the original process.
(4) Accounting treatment and analysis of the number of tax credits retained by general taxpayers during the liquidation period
In the process of paying taxes on the operation of an enterprise, in the case of bankruptcy and liquidation of the company due to poor management or other factors, the accounting treatment of value-added tax deduction and tax return shall consider based on the “Notice of Certain Value-added Tax Policies”. It stands clearly stated in the relevant policy notice that when the general value-added tax taxpayer liquidates and cancels the company’s assets, the tax deduction amount will not process for a tax return, and the company’s inventory cannot transfer out as the input tax amount.
Therefore, during the liquidation period of ordinary taxpayers, the processing of the value-added tax deduction can only convert into inventory costs for calculation. At the same time, when the company calculates the taxable income, the company’s value-added tax deduction can deduct. By the relevant announcements and notices of the State Taxation Bureau, the issue of value-added tax retention and tax return can stand effectively dealt with, and the accounting processing of value-added tax retention and tax return can stand done well to avoid tax problems during the processing operation.
(5) Accounting treatment of the tax deduction amount of the tax payable by ordinary taxpayers
In the process of paying taxes for general value-added tax taxpayers, there will also stand value-added tax arrears. When this situation stands encountered in the accounting processing of value-added tax withholding tax return, the accounting processing operation of the amount of tax payable by general taxpayers and the amount of tax withholding tax deduction can carry out based on the relevant notice of the State Taxation Bureau to avoid tax problems during the accounting processing process.
In the relevant documents issued by the State Taxation Bureau for the accounting and processing of tax deductions for general taxpayers, there are clear regulations on the order and scope of the deduction of value-added tax arrears by the input tax amount. When the input tax amount stands deducted from the value-added tax arrears, the tax amount stands mainly deducted by the chronological order in which the company’s tax arrears occur, that is, the tax arrears that occur first stand deducted, and the tax arrears that occur later stand deducted afterward.
The value-added tax arrears
What can deduct are mainly bad debts, tax arrears, and late fees for tax arrears, and the actual deduction amount is based on the notice issued by the competent tax authority. If during the accounting process of the tax deduction for the tax payable by ordinary taxpayers, the tax deduction at the end of the period is less than the total amount of tax payable, the tax deduction at the end of the period shall use as the actual tax deduction.
At the same time, according to the corresponding calculation method, the bad debts and tax arrears, and late fees that can deduct from the tax deduction at the end of the period stand calculated, and the accounting processing of the tax deduction for the tax payable carry out rationally, to avoid the probability of risk problems in the process of value-added tax deduction and tax return, and ensure the quality and efficiency of accounting processing.
Prevention of the risk of value-added tax retention and tax return
(1) The risk and prevention of incorrect calculation of the incremental tax deduction amount
In the process of value-added tax deduction and tax return. Incorrect calculation of the incremental tax deduction amount is a common processing risk problem. Which will have a direct impact on the application for a value-added tax deduction and the processing results. Therefore, when calculating the amount of incremental tax deduction, special attention should pay to the accuracy of the calculation results to avoid the failure of the application for incremental tax deduction due to errors in the calculation results.
The calculation of the incremental tax credit can consider the taxpayer’s application conditions. Accountants should have a clear understanding of the rolling calculation method of the incremental tax credit. Judging from the relevant documents issued by the State Administration of Taxation. General value-added tax taxpayers can enjoy a 60% tax return rate. While individual advanced manufacturing companies can enjoy a 100% tax return rate.
Therefore, when enterprises calculate the incremental tax credit, they must also conduct calculation and analysis by their industry policies to ensure the accuracy of the calculation results of the incremental tax credit and control the risk of accounting for the incremental tax credit. If an enterprise has problems in the calculation process of value-added tax deduction and tax return, it can also request advice from the competent tax authority or a professional tax processing service agency promptly to prevent and control the occurrence of accounting and processing risks of incremental tax deduction in advance.
(2) Risks and precautions that the taxpayer’s prescribed standards have not been met
In the process of value-added tax retention and tax return, there will also be a risk of value-added tax retention and tax return due to non-compliance with the taxpayer’s prescribed standards, which will affect the implementation of value-added tax retention and tax return. Therefore, when carrying out the work of value-added tax retention and tax return, the taxpayer’s credit rating, violations of laws and regulations, and the enjoyment of relevant tax incentives should be understood and analyzed to assess whether the taxpayer meets the application criteria for value-added tax retention and tax return.
At the same time, taxpayers themselves should also strengthen their attention to the improvement of the tax credit. Maintain their tax credit, and avoid the occurrence of illegal tax evasion and tax evasion during the tax payment process. Which leads to the inability to meet the value-added tax deduction and tax return standards. If the taxpayer’s situation can adapt to multiple tax policies. The final tax method should still base on the optimal solution.
And after choosing the corresponding tax policy, we must also pay attention to the compatibility of other tax policies. With the value-added tax deduction and tax return policy to avoid tax risks in the process of tax accounting. In addition, since the newly established corporate tax credit rating is M-level. It does not meet the requirements for value-added tax retention and tax return. So special attention should pay to the criteria for evaluating taxpayers.
(3) The content of the time regulations ignores risks and precautions
In the accounting processing process of value-added tax deduction and tax return. It is also easy to deal with risks due to inattention to time regulations. The relevant documents issued by the State Taxation Bureau are clearly stated. That is the general value-added tax taxpayer has already applied for a total tax deduction. And then the tax deduction amount generate. The tax deduction amount calculated in the previous application can no longer use for secondary purposes.
Therefore, in summary, there are only two processing opportunities for value-added tax retention tax returns in a year at most. General value-added tax taxpayers can apply for an incremental value-added tax return in any month. After meeting the requirements for value-added tax retention and tax return. The specific application time is based on the taxpayer’s situation.
In addition, if taxpayers file tax return exemption and tax return declaration at the same time. The tax authorities will give priority to the tax return exemption requirements they apply for. Therefore, to avoid such risks during the processing of tax return business. Taxpayers should have a general understanding of different tax return businesses. And pay attention to the application time of each tax return business.
(4) Failure to obtain the application materials in a timely and accurate manner, risk prevention
From the analysis of the calculation formula of the value-added tax deduction amount. It can be found that in addition to the prescribed application materials and certificates. The input tax amount on other deduction certificates cannot be used as the value-added tax deduction tax return application certificate.
Therefore, to avoid the risk of value-added tax retention and tax return due to incomplete collection of application materials, it is necessary to collect relevant documents during the process of value-added tax generation, collect and organize the declaration materials promptly, and ensure that the submitted application materials and certificates are true and reliable, in line with the requirements of the relevant declaration regulations of the State Administration of Taxation, and the application materials and certificates shall not be forged.
Once it is found that the applicant has used illegal means to falsify the application materials. And defrauding the incremental tax deduction amount will bear corresponding legal responsibilities. Through the improvement of the reliability and authenticity of the value-added tax retention tax return application materials. High-quality accounting processing work is carried out.
Conclusion
In summary, when the value-added tax retained tax credit is returned. Attention should be paid to clarifying the concept of the incremental retained tax credit. Reviewing whether the applicant conditions for the tax return of the retained tax credit are up to standard. And carefully calculating the return of the retained tax credit to ensure that the value-added tax retained tax return is correct.
At the same time, corresponding accounting processing should be carried out according to the different value-added tax retention. And tax return conditions of ordinary taxpayers and attention should be paid to the calculation of incremental value-added tax retention. And tax return errors in the process of value-added tax retention and tax return. Insufficient application conditions for taxpayers, time regulations are ignored, and the application materials are not accurate enough. Comprehensive and other risks prevention, scientific development of value-added tax retention, and tax return work. Promote the implementation of the national tax reduction and fee reduction policy.
A brief analysis of the accounting processing cycle of value-added tax deduction tax return essay; Photo by Markus Winkler on Unsplash.
Financial analysis refers to an assessment of the viability, stability, and profitability of a business, sub-business, or project. What is Financial Analysis? Meaning, Objectives, and Types. It is performed by professionals who prepare reports using ratios that make use of information taken from financial statements and other reports.
Explanation of each of the Content, What is Financial Analysis? Meaning, Objectives, Types, and Tools.
Financial analysis is the evaluation of a business to determine its profitability, liabilities, strengths, and future earnings potential. A wide variety of techniques may be utilized to assess an organization’s financial viability including the most common methodologies of horizontal analysis, vertical analysis, and ratio analysis. Impact of Big Data Analysis on CPA Audit.
Most analytical methods involve the company’s financial statements, internal or external audits, and investigations. Also, Financial analysis is a critical aspect of all commercial activity. As it provides actionable insights into the organization’s health and future potential. Not only does this information provide investors and lenders with critical data that may affect the price of stocks or interest rates. But these reports also allow company managers to gauge their performance on expectations or industry growth. From a management point of view, financial analyses are critical to the success of the company. Because they highlight weaknesses and strengths that directly affect competitiveness. Don’t forget to read the Cost of Capital.
Meaning of Financial analysis:
An analysis of financial statements is the process of critically examining in detail accounting information given in the financial statements. For analysis, individual items are studied, and their interrelationships with other related figures are established. The data is sometimes rearranged to have a better understanding of the information with the help of different techniques or tools for the purpose. Analyzing financial statements is a process of evaluating the relationship between parts of financial statements to obtain a better understanding of the firm’s position and performance.
The analysis of financial statements thus refers to the treatment of the information contained in the financial statements in a way to afford a full diagnosis of the profitability and financial position of the firm concerned. For this purpose financial statements are classified methodically, analyzed, and compared with the figures of previous years or other similar firms. The term ‘Analysis’ and ‘interpretation’ are closely related, but a distinction can be made between the two. Analysis means evaluating the relationship between the components of financial statements to understand the firm’s performance in a better way.
Various account balances appear in the financial statements. These account balances do not represent homogeneous data so it is difficult to interpret them and draw some conclusions. This requires an analysis of the data in the financial statements to bring some homogeneity to the figures shown in the financial statements. Interpretation is thus drawing inferences and stating what the figures in the financial statements mean. Interpretation is dependent on the interpreter himself. The interpreter must have experience, understanding, and intelligence to draw correct conclusions from the analyzed data.
Objectives of Financial analysis:
Analysis of financial statements is made to assess the financial position and profitability of a concern. Analysis can be made through accounting ratios, fitting trend lines, common size statements, etc. Accounting ratios calculated for many years show the trend of the change of position, i.e., whether the trend is upward or downward, or static. The ascertainment of the trend helps us in making estimates for the future. Keeping in view the importance of accounting ratios the accountant should calculate the ratios in the appropriate forum. As early as possible, for presentation to management for managerial control.
The main objectives of the analysis of financial statements are :
to assess the profitability of the concern;
to examine the operational efficiency of the concern as a whole and its various parts or departments;
to measure the short-term and long-term solvency of the concern for the benefit of the debenture holders and trade creditors;
to undertake a comparative study with one firm with another firm or one department with another department; and
to assess the financial stability of a business concern.
The different users and decision makers to achieve the following objectives:
Assessment of Past Performance and Current Position:
Past performance is often a good indicator of future performance. Therefore, an investor or creditor is interested in the trend of past sales, expenses, net income, cash flow, and return on investment. These trends offer a means for judging management’s past performance and are possible indicators of future performance. Similarly, the analysis of the current position indicates where the business stands today.
For instance, the current position analysis will show the types of assets owned by a business enterprise and the different liabilities due to the enterprise. It will tell what the cash position is and how much debt the company has to equity. And how reasonable the inventories and receivables are.
Prediction of Net Income and Growth Prospects:
The financial statement analysis helps in predicting the earning prospects and growth rates in the earnings. Which are used by investors while comparing investment alternatives. And other users are interested in judging the earning potential of business enterprises.
Investors also consider the risk or uncertainty associated with the expected return. The decision-makers are futuristic and are always concerned with the future. Financial statements which contain information on past performances are analyzed and interpreted. As a basis for forecasting future rates of return and for assessing risk.
Prediction of Bankruptcy and Failure:
Financial statement analysis is a significant tool in predicting the bankruptcy and failure probability of business enterprises. After being aware of the probable failure, both managers and investors can take preventive measures to avoid/minimize losses. Corporate management can effect changes in operating policy, reorganize financial structure or even go for voluntary liquidation to shorten the length of time losses. In the accounting and finance area, empirical studies conducted have suggested a set of financial ratios which can give the early signal of corporate failure.
Such a prediction model based on financial statement analysis is useful to managers, investors, and creditors. Managers may use the ratios prediction model to assess the solvency position of their firms and thus can take appropriate corrective actions. Investors and shareholders can use the model to make the optimum portfolio selection and to bring changes in the investment strategy to their investment goals. Similarly, creditors can apply the prediction model while evaluating the creditworthiness of business enterprises.
Loan Decision by Financial Institutions and Banks:
Financial statement analysis stands used by financial institutions, loaning agencies, banks, and others to make sound loan or credit decisions. In this way, they can make the proper allocation of credit among the different borrowers.
Financial statement analysis helps in determining credit risk, deciding the terms and conditions of the loan if sanctioned, interest rate, maturity date, etc.
Tools of Financial Analysis:
Financial Analysts can use a variety of tools for analysis and interpretation of financial statements particularly to suit the requirements of the specific enterprise. Explanations of the Tools of Financial Analysis,The principal tools are as under:
Note: Tools of Financial Analysis – the tool of contents explanation later in these articles.
Types of Financial Analysis:
There is a myriad of techniques that can be used to analyze the performance of a commercial enterprise. But the most common methods use the following strategies:
Horizontal Analysis:
This method uses past performance as a baseline metric for the success of the company. There are variations in this method that may use some number of years as a standard. For example, if the company has been in existence for some time, the two years prior may use as a comparison. If the company is relatively new, it is common to use the initial year as a baseline and plot performance to it.
Vertical Analysis:
Also known as component percentages, this type of analysis compares the profits to assets, liabilities, and equities. This method is generally helpful when comparing a large number of similar companies. The limitation of this method is that it often does not weigh factors that impact future viability appropriately, like long-term partnerships, and one-time losses or investments.
Ratio Analysis:
This method analyzes various aspects of the company’s financial health. For example, a current ratio is the comparison of assets to liabilities. This type of analysis is extremely popular due to the analyst’s ability to choose two key features of businesses to analyze. Many analysts utilize this type of analysis to support their evaluations of organizations even if conventional analytical methodologies may not be as positive. The weakness in this type of analysis is that if the two characteristics stand poorly chosen, an unreliable estimation of financial viability may produce.
Stock Price Movement:
This technique relies on analyzing the performance of the company’s stock rather than its financial health. In essence, this method uses the financial markets as an analytical tool. Various methods may use to evaluate the stock’s performance including enlarging or narrowing the window of evaluation, comparison to similar companies, and trend analysis. There are some serious drawbacks to this technique. If the markets are relying on inaccurate data or analytical methodologies, they may be pricing stocks higher than their actual value. Stock analyses often ignore the company’s intrinsic sustainability to profit from stock price fluctuations and are unreliable foundations for establishing long-term investment relationships.
Financial analysis is the examination of financial information to reach business decisions. This analysis typically results in the reallocation of resources to or from a business or a specific internal operation. This type of analysis applies particularly well to the following situations:
Investment decisions by the external investor:
In this situation, a financial analyst or investor reviews the financial statements and accompanying disclosures of a company to see if it is worthwhile to invest in or lend money to the entity. This typically involves ratio analysis to see if the organization is sufficiently liquid and generates a sufficient amount of cash flow. It may also involve combining the information in the financial statements for multiple periods to derive trend lines that can use to extrapolate financial results into the future.
Investment decisions by the internal investor:
In this situation, an internal analyst reviews the projected cash flows and other information related to a prospective investment (usually for a fixed asset). The intent is to see if the expected cash outflows from the project will generate a sufficient return on investment. This examination can also focus on whether to rent, lease, or purchase an asset.
What is Financial Analysis? Meaning, Objectives, and Types. Image Credit from @Pixabay.
Financial analysis tools can elaborately stand defined as an assessment of, how effective the investments or funds engage by the organization or business.
In this article, we will discuss the six important tools of financial analysis. Explanations of the Tools of Financial Analysis.
To check the efficiency of funds used for operations, and lastly to secure debtors and claims against the business’s assets. Tools of Financial Analysis: Financial Analysts can use a variety of tools for the analysis and interpretation of financial statements particularly to suit the requirements of the specific enterprise. The principal tools are as under:
Comparative financial statements are those statements that have stood designed in a way to provide time perspective to the consideration of various elements of financial position embodied in such statements. In these statements, figures for two or more periods exist placed side by side to facilitate comparison. Both the Income Statement and Balance Sheet can prepare in the form of Comparative Financial Statements.
Comparative Income Statement
The comparative Income Statement is the study of the trend of the same items/group of items in two or more Income Statements of the firm for different periods. The changes in the Income Statement items over the period would help in forming an opinion about the performance of the enterprise in its business operations. The Interpretation of the Comparative Income Statement would be as follows:
The changes in sales should compare with the changes in the cost of goods sold. If the increase in sales is more than the increase in the cost of goods sold. Then the profitability will improve.
An increase in operating expenses or a decrease in sales would imply a decrease in operating profit. And a decrease in operating expenses or increase in sales would imply an increase in operating profit.
The increase or decrease in net profit will give an idea of the overall profitability of the concern.
Comparative Balance Sheet
The comparative Balance Sheet analysis would highlight the trend of various items and groups of items appearing in two or more Balance Sheets of a firm on different dates. The changes in periodic balance sheet items would reflect the changes in the financial position at two or more periods. The Interpretation of Comparative Balance Sheets is as follows:
The increase in working capital would imply an increase in the liquidity position of the firm over the period. And the decrease in working capital would imply a deterioration in the liquidity position of the firm.
An assessment of the long-term financial position can stand made by studying the changes in fixed assets, capital, and long-term liabilities. If the increase in capital and long-term liabilities is more than the increase in fixed assets. It implies that a part of the capital and long-term liabilities has stood used for financing a part of working capital as well. This will be a reflection of the good fiscal policy. The reverse situation will be a signal toward an increasing degree of risk to which the long-term solvency of the concern would expose to.
The changes in retained earnings, reserves, and surpluses will indicate the trend in the profitability of the concern. An increase in reserve and surplus and the Profit and Loss Account is an indication of improvement in profitability of the concern. The decrease in these accounts may imply the payment of dividends, issue of bonus shares, or deterioration in the profitability of the concern.
Common-size Financial Statements:
Common-size Financial Statements are those in which figures reported stand converted into percentages to some common base. In the Income Statement, the sale figure assumes to be 100 and all figures stand expressed as a percentage of sales. Similarly, in the Balance sheet, the total of assets or liabilities stands taken as 100 and all the figures stand expressed as a percentage of this total.
Common Size Income Statement
In the case of the Income Statement, the sales figure assume to be equal to 100. And all other statistics stand expressed as the percentage of sales. The relationship between items on the Income Statement and the volume of sales is quite significant. Since it would help evaluate the operational activities of the concern. The selling expenses will certainly go up with the increase in sales. The administrative and financial expenses may go up or may remain at the same level. In case of a decline in sales, selling expenses should decrease.
Common Size Balance Sheet
For a common-size Balance Sheet, the total of assets or liabilities takes 100. And all the figures are expressed as a percentage of the total. In other words, each asset stands expressed as the percentage of total assets/liabilities. And each liability exists expressed as the percentage of total assets/liabilities. This statement will throw light on the solvency position of the concern by providing an analysis of the pattern of financing both long-term and working capital needs of the concern.
Trend Analysis
The third tool of financial analysis is trend analysis. This is immensely helpful in making a comparative study of the financial statements for several years. Under this method, trend percentages calculate for each item of the financial statement taking the figure of the base year as 100. The starting year stands usually taken as the base year. The trend percentages show the relationship of each item with its preceding year’s percentages.
These percentages can also be present in the form of index numbers showing the relative changes in the financial data of a certain period. This will exhibit the direction, (i.e., upward or downward trend) to which the concern is proceeding. These trend ratios may compare with industry ratios to know the strong or weak points of concern. These stand calculated only for major items instead of calculating for all items in the financial statements.
While calculating trend percentages, the following precautions may be taken:
The accounting principles and practices must follow constantly over the period for which the analysis make. This is necessary to maintain consistency and comparability.
The base year selected should be a normal and representative year.
Trend percentages should calculate only for those items which have a logical relationship with one another.
Trend percentages should also be carefully studied after considering the absolute figures on which these are based. Otherwise, they may give misleading conclusions.
To make the comparison meaningful, trend percentages of the current year should adjust in light of price level changes as compared to the base year.
Cash Flow Statement
A cash flow statement shows an entity’s cash receipts classified by major sources. And its cash payments classified by major uses during a period. It provides useful information about an entity’s activities in generating cash from operations to repay debt, distribute dividends or reinvest to maintain or expand its operating capacity. About its financing activities, both debt and equity; and about its investment in fixed assets or current assets other than cash.
In other words, a cash flow statement lists down various items and their respective magnitude. Which brings about changes in the cash balance between two balance sheet dates. All the items whether current or non-current that increase or decrease the balance of cash are included in the cash flow statement. Therefore, the effect of changes in the current assets and current liabilities during an accounting period in cash position. Which do not shown in a fund flow statement depicted in a cash flow statement.
The depiction of all possible sources and application of cash in the cash flow statement helps the financial manager in short-term financial planning in a significant manner because the short-term business obligations such as trade creditors, bank loans, interest on debentures, and dividends to shareholders can be met out of cash only. The preparation of the cash flow statement is also consistent with the basic objective of financial reporting. Which is to provide information to investors, creditors, and others that would be useful in making rational decisions.
The basic objective is to enable the users of the information to predict cash flows in an organization. Since the ultimate success or failure of the business depends upon the amount of cash generated. This objective stands sought to be met by preparing a cash flow statement.
Ratio Analysis
A ratio is a simple arithmetical expression of the relationship of one number to another. According to the Accountant’s Handbook by Wixon, Kelland bedboard, “a ratio” is an expression of the quantitative relationship between two numbers”. In simple language, the ratio of one number is expressed in terms of the other and can work out by dividing one number by the other. This relationship can express as (i) percentages, say, net profits are 20 percent of sales (assuming net profits of Rs. 20,000 and sales of Rs. 1,00,000), (ii) fraction (net profit is one-fourth of sales), and (iii) proportion of numbers (the relationship between net profits and sales is 1:4). The rationale of ratio analysis lies in the fact that it makes related information comparable.
A single figure by itself has no meaning but when expressed in terms of a related figure. It yields significant inferences. Ratio analysis helps in financial forecasting, making comparisons, evaluating the solvency position of a firm, etc. For instance, the fact that the net profits of a firm amount to, say, Rs. 20 lakhs throws no light on its adequacy or otherwise. The figure for net profit has to consider other variables. How does it stand for sales? What does it represent by way of return on total assets used or total capital employed?
In case net profits
They show in terms of their relationship with items such as sales, assets, capital employed, and equity capital. And so on, meaningful conclusions can draw regarding their adequacy. Ratio analysis, thus, as a quantitative tool, enables analysts to draw quantitative answers to questions such as. Are the net profits adequate? Are the assets being used efficiently? Can the firm meet its current obligations and so on? However, ratio analysis is not an end in itself. Calculation of mere ratios does not serve any purpose unless several appropriate ratios analyze and interpret.
The following are the four steps involved in the ratio analysis:
The selection of relevant data from the financial statements depends upon the objective of the analysis.
Calculation of appropriate ratios from the above data.
Comparison of the calculated ratios with the ratios of the same firm in the past, the ratios developed from projected financial statements or the ratios of some other firms, or the comparison with ratios of the industry to which the firm belongs.
Interpretation of the ratio.
Funds Flow statements
The term ‘flow’ means movement and includes both ‘inflow’ and ‘outflow’. The term ‘flow of funds’ means the transfer of economic values from one asset or equity to another. The flow of funds stands said to have taken place when any transaction makes changes in the number of funds available before happy the transaction happens the effect of the transaction results in the increase of funds. It calls a source of funds and if it results in the decrease of funds, it knows as an application of funds.
Further, in case the transaction does not change funds, it stands said to have not resulted in the flow of funds. According to the working capital concept of funds, the term ‘flow of funds’ refers to the movement of funds in the working capital. If any transaction increases working capital. It stands said to be a source of inflow of funds and if it results in a decrease of working capital. It stands said to be an application or outflow of funds.
Explanations of the Tools of Financial Analysis Image Credit from @Pixabay.
This Essay article Discussion of The scope of the financial budget key. It stands also called the general budget, which is the last link of the comprehensive budget system. And reflects the results of the daily business budget and the special budget in a comprehensive manner. Also, It includes only cash budgets and projected statements. You may also like to know the Analysis of Project Based Learning Benefits.
Here are the articles to explain, The scope of the financial budget key!
The preparation method and application of the financial budget key;
Fixed budget and flexible budget:
The fixed budget is based on the normal and objective level of a certain business volume as the sole basis to prepare the budget method. It is highly likely to be inconsistent with reality and is only applicable to enterprises or non-profit organizations with relatively stable business volumes.
The flexible budget is a budget method that can adapt to various situations based on the cost habit and the dependence on business volume, cost, and profit. Mainly used to prepare flexible cost (expense) budgets and flexible profit budgets. The main methods of compiling cost budgets include the formula method, tabulation method, and also graphic method. For the preparation of flexible profit budgets, the factor method is used for enterprises operating in a single variety or for multi-variety operating enterprises that use the division method to deal with fixed costs, and the percentage method is used for enterprises operating in multiple varieties.
Incremental budget and zero-based budget:
An incremental budget is a method of appropriately adjusting the original cost items according to the actual situation of the budget based on the cost and expense level of the base period. While simple and easy to implement, it may keep unreasonable spending items in the budget.
Zero-based budgeting, regardless of the base period, takes zero as the starting point for all budgetary expenditures, considers the content of each cost and whether the expenditure standards are reasonable one by one, weighs the priorities, and guarantees unavoidable and non-delayable projects, based on a comprehensive balance Methods of preparing a budget. Also, It is more reasonable and can reduce costs. But the workload is large and the focus is not easy to highlight. It is suitable for the preparation of cost budgets for service departments that are more difficult to identify.
Regular and rolling budgets:
Regular budgets stand prepared with a constant period as the budget period. Although it is convenient to compare between actual and budget, and analysis and evaluation. Also, the budget stands generally prepared in the first two or three months of the year. It is not clear about the situation of the plan period, and it is easy for managers to only consider the completion of the current plan during the implementation, and lack long-term plans.
Rolling budget, which separates the budget period from the fiscal year, analyzes the difference between the implementation of the current budget and the actual situation, revises it in time, and continuously extends and supplements the budget. It is a continuous and also stable “special regular” budget method. In specific operations. It can roll on a monthly, quarterly or mixed basis. The mixed rolling has the characteristics of having a greater grasp of short-term forecasts. And a small grasp of long-term forecasts according to people’s understanding of the future. Which can not only achieve long-term plans and short-term arrangements. The distance is slightly closer, and the budget workload can reduce.
Financial Budgeting Basis
The business budget and special decision-making budget are the data sources of the financial budget. And they form a complete system and also restrict each other. The specific preparation should start from the data flow relationship between budgets. And also the data relationship within each budget.
The sales budget
The data relationships in the sales budget are:
Sales revenue of a certain product = sales quantity of this product × unit price;
Total sales revenue of the enterprise = sum of sales revenue of each product;
Sales cash income = (total sales revenue – current credit sales) + recovery Accounts receivable in the previous period;
Sales tax expenditure = total sales revenue of the enterprise × relevant tax rate.
The production budget is a budget prepared separately by product name and quantity. During the budget period, in addition to having enough products for sale. Furthermore, The inventory level at the beginning and end of the period should also consider.
Estimated production volume of a certain product = Estimated sales volume + ending product inventory – beginning product inventory;
Ending inventory of the previous period = inventory at the beginning of the current period.
The direct material budget
The data relationships in the direct material budget are:
The amount of a certain material consumed by a product = the production volume of the product × the material consumption quota of the product;
The consumption of a certain material = the sum of the material consumed by each product;
The purchase amount of a certain material = Consumption of the material + material inventory at the end of the period – material inventory at the beginning of the period;
Ending inventory of the previous period = inventory at the beginning of the current period;
The purchase cost of a certain material = purchase amount of this material × unit price;
Also, The total purchase cost of materials = the sum of purchase costs of each material;
Cash expenditures for direct materials = (total material purchase cost – material purchase amount on credit) + repayment of previous material purchases on credit.
The direct labor budget
The data relationship in the direct labor budget is as follows:
The total man-hours consumed by a certain workshop to produce a certain product = the output of the product produced by the workshop × the labor unit consumption quota of the product in the workshop;
The total man-hours consumed by a certain product = the product in each workshop The sum of the total working hours consumed;
Also, The salary budget of a product = the total working hours consumed by the product × the wage rate per working hour;
Other direct labor expenses = salary budget amount × accrual percentage.
The product production cost budget is a synthesis of the three budgets of materials, labor, and expenses. And the total production cost and unit production cost of each product during the budget period can be obtained.
The specific preparation of the financial budget
The relevant data of daily business budget and special decision-making budget flow into the cash budget, and form a certain data relationship:
Cash balance at the beginning of the period + operating cash income – operating cash expenditure – capital cash expenditure = cash balance;
Also, Cash Surplus + fundraising – use of funds = cash balance at the end of the period;
Noncash balance in the previous period = cash balance at the beginning of the current period. The principles for preparing forecast statements are the same as those for accounting.
This Essay article Discussion of Opportunities and Challenges of CPA Auditing. With the advent of the era of big data, the audit industry faces a new information environment. Against this backdrop, audit risks and approaches can change dramatically. Compared with traditional CPA auditing, CPA audit in the era of big data reflects more aspects that traditional CPA audit cannot or is difficult to do. Which improves the quality of audits, increases audit responsibilities, and makes the audit industry more effective. more opportunities.
Here are the articles to explain, On the Opportunities and Challenges of CPA Auditing in the Era of Big Data Essay!
Big data reduce audit risks, improves the quality of audit work and results, and realizes all-around management of CPA audits. However, the advantages and disadvantages of big data stand also two-sided. Although there are many conveniences, there are inevitably some problems. Such as the confidentiality of financial information, the difficulty of supervising and managing audit work, etc. You may also like to know about A case study of CPA audit failures in listed companies.
Whether it can seize the opportunity brought by the era of big data, face challenges, reduce the risk of independent audit failure, and improve audit quality has become a problem that the certified public accountant, Therefore, the auditing industry should consider how to adapt to the auditing model in the era of big data to better build auditing in the new environment. This article will focus on this issue and analyze the risk and quality of CPA audits.
Characteristics of CPA audit in the era of big data
Comparison of traditional CPA audit and big data CPA audit
Traditional audits exist mainly conducted manually and in a paper-based environment. Big data auditing uses more new technologies. What is the Comparison between Chinese and Western cultures? The similarities and differences between the two can analyze as follows.
The same
Both traditional CPA audits and big data CPA audits must use the ” CPA Law” and related standards as business standards and professional norms and use relevant laws, regulations, and accounting standards as the criteria for judging whether the audited unit’s fiscal revenue and expenditure are legal.
And whether it is a traditional or big data audit, the audit process must go through the three stages of preparation, implementation, and reporting, investigation, and understanding, signing of business agreements, evaluating internal control, confirming the level of importance, analyzing audit risks, formulating plans, and correcting The audited unit conduct internal control tests, performs substantive tests on statements, organizes audit evidence collected in the audit business, audits working papers, forms audit opinions, prepares reports and other basic audit procedures to express audit opinions.
Differences
In terms of audit evidence, traditional CPA audits mainly exist on paper. And audit evidence exists obtained by finding the account books and related materials of the audited unit. While big data CPA audits reduce complicated paper tasks. The audited unit collects audit evidence; in terms of audit procedures, traditional CPA audits mainly rely on traditional audit procedures, while big data CPA audits add more technical support to make it more convenient; in terms of audit methods.
The traditional CPA auditing method is a sampling audit, while a big data CPA audit can conduct an overall audit; in terms of audit time, a traditional CPA audit is a regular audit, while a big data CPA audit more uses a real-time audit; Opportunities and Challenges of CPA Auditing requires manual operation of the audited unit, while big data CPA audit requires the audited unit to adopt automatic control; from the perspective of staff, traditional CPA auditors need professional skills, while big data CPA audit requires auditors to master the ability to operate these information technologies; From the perspective of audit thinking, traditional CPA audit needs to analyze each part of the audit object first, then integrate and summarize it.
Big data CPA audit breaks the traditional audit thinking, masters the audit object, analyzes the data, and then makes an overall evaluation; audit In terms of risk, traditional CPA audits have many risks because they are mainly sampling audits. Big data CPA audits realize overall auditing, which reduces the risk of sampling audits on the one hand; in terms of audit quality, traditional CPA audits cannot guarantee audit data. The comprehensive and big data CPA audit enables auditors to use computer technology to avoid manual errors, make the audit objects more comprehensive and complete, and the audit quality becomes higher.
The basic characteristics of big data CPA audit
Because of the support of big data, the overall audit can realize. Even in the face of a large number of samples, the sampling method stands no longer used. Which reduces the audit risk and improves the accuracy of the audit results. Big data enables the audited unit to use external data, which solves the disadvantages of traditional auditing that it is difficult to obtain and use external data and can detect possible problems from many aspects, improving the accuracy of auditing. In the big data environment, auditors can directly use the original data to complete the corresponding audit work, reducing the possibility of fraud by the audited unit, and greatly saving time, manpower, and material resources.
Because the audit work under big data runs on the Internet, auditors do not need to go to the audited unit for investigation, nor do they need to work at a fixed time. Only one networked computer can work, making the audit work more flexible. Greatly improve audit efficiency. Big data auditing makes the classification of budget quota indicators more refined, which improves the comparability between indicator values. Big data auditing can reduce audit costs. For example, audit work papers need to store for about 10 years. Using big data information technology can save data on cloud platforms and reduce paper usage.
Auditors data auditing
Auditors can also use the cloud platform to work. Which stands not limited by time and space, reducing the corresponding management costs. Opportunities and Challenges of CPA Auditing. Big data auditing changes the content from financial auditing to comprehensive performance auditing. In the past, auditing mainly focused on the revenue and expenditure of the audited unit, which made the audit supervision only analyze the financial data, and could not analyze the business indicators of the audited unit in depth, resulting in auditing. The results cannot fully reflect the performance status of the audited unit. While the big data audit makes the data of the analysis of business information. So that the comprehensive performance audit can realize.
Opportunities and challenges faced by CPA auditing in the era of big data
Opportunities for CPA auditing in the era of big data
Improve audit quality
The main reason why traditional audits use sampling audits is that enterprises need to audit a lot of data. And information and the collection of data require a long process and time. These limits work efficiency to a large extent, so only sampling audits can use, big data Auditing realizes a comprehensive audit. Opportunities and Challenges of CPA Auditing. Which greatly improves audit quality. Due to the use of big data, the audit evidence has become more, more accurate, and more comprehensive, and all data under the big data audit is open and transparent, so there is no interference from other factors. It is for these reasons that audit quality will greatly improve.
Audit risk reduction
Big data technology has a powerful ability to process information. Which greatly reduces the pressure of audit work, and through big data technology. A more accurate answer can obtain, making the audit work more comprehensive, thereby reducing audit risks. The application of big data will also reduce fraud because the application of technology makes audit data more transparent, and all information can make public. audit risk.
Audit cost reduction
Under big data technology, the working time and space of auditors have become flexible. And the upload and entry of some materials can save to the Internet system or cloud data platform. Which can save space and can also stand permanently stored. At the same time, it can directly search on the Internet, which improves work efficiency. Saves time and space, and reduces audit costs to a large extent.
Challenges faced by CPA auditing in the era of big data
Relevant auditors need to have data analysis capabilities
From traditional auditing to big data auditing, auditing methods have changed. It is far from enough to rely on previous skills. When using big data auditing, you must be sensitive to data and have the ability to analyze data. , and to be proficient in using relevant software to analyze and process data, and then draw true and reliable conclusions. In addition to the above abilities, the audit work also requires knowledge of the law, economy, management, and other knowledge and the ability of interpersonal communication, the use of information system technology, the ability to evaluate internal control, etc.
The audit work is a comprehensive and complex talent with comprehensive knowledge. At this stage, the audit department Most of them are audit staff, lacking professional technical analysts, and some older staff may be slow to accept new technologies. This seriously affects the development of audit work in the big data environment. Therefore, it is necessary to improve the professional and technical capabilities of auditors and to cultivate auditors’ working ability to understand big data technology and its application in audit work.
Audit application technology is backward
Big data auditing is different from traditional auditing. It is a brand-new auditing method. Big data auditing no longer relies on the data collected, sorted, and analyzed manually in the past. These tasks will realize by computers. However, the computer does not directly provide accurate data to the audit staff but provides traditional display methods such as picture information and video, which are difficult to accurately convey the information, so the auditor needs to process the data to make it visualized again. However, when applying information technology, the low level reduces the ability to accurately analyze data.
Data privacy issues
The big data audit results stand uploaded through the network. So it is difficult to ensure the confidentiality of the data. Due to the high commercial value of the activities involved in the audit work. Some auditors may disclose data content that violates professional ethics for profit. However, in the current cloud computing model, it is very difficult to supervise and manage the audit work well. Since the audit results stand managed by a third party. The audit-related personnel can easily evade their responsibilities. Another aspect is the risk of the network system. Which requires enterprises to improve the defense capabilities of their audit systems and the ability to deal with various network risks. Otherwise, a loophole in the system will leak information and cause irreparable losses.
Development strategy of CPA audit in the era of big data
Strengthen the training of relevant professionals
The application of big data auditing requires a large number of talents with professional skills, and now most auditors do not have this ability, so it is necessary to provide the professional ability and skill training for auditors and to change the auditors’ ideology and thinking, In addition to training staff who can use big data auditing, it is also necessary to train auditors in the audit team to have the skills to analyze and evaluate audit big data, to better ensure the accuracy and reliability of big data. In the training process, it is necessary to teach students by their aptitude. So that each person participating in the audit personalizes.
Build your data platform
When using the big data platform, it is easy to block when collecting data and information. When the audited unit requires an audit report with no reservations. The requirements of the audited unit and the requirements of the auditing standards will contradict each other. At this time, if a business When the firm has its database and its data platform. The firm can enter customer data and then research it. Using these data can better understand the past and present of the enterprise, predict and analyze the future development of the enterprise, and then can expand the scope of the accounting firm’s business so that the accounting firm can carry out business such as forecasting, tax representation, consulting and corporate strategy, and can expand its business scope and bring more benefits to it.
Improve safety awareness and strengthen risk prevention
Because the computer audit results stand uploaded through the network. It is difficult to ensure that the data is completely confidential. First, the big data cloud platform must be encrypted to control user access and control big data to protect sensitive private information. Secondly, to implement protection in the process of big data collection and analysis, different managers need to be used in the implementation process. Finally, it is necessary to establish a security platform of a heterogeneous data center that is detected by meshed clients, to detect anomalies in time, so that data can be protected from the most basic places.
Improve the audit organization model
The traditional audit organization model adopts a decentralized method, most of which is group analysis. The staff work in small groups, and then the data analysis through groups. The big data audit model is a unified overall data body. It is based on data analysis and the audit work carried out with data as the core. It can effectively integrate resources and become more scientific and accurate.
Standardize auditing standards and formulate policies and regulations
Under today’s big data auditing model, my country’s auditing system has not changed because of this. The current auditing system is only aimed at traditional auditing procedures, while big data auditing procedures have changed. Therefore, the state should support and encourage big data. At the same time as data development, relevant policies are issued and implemented to truly and effectively promote the development of the big data industry, so that auditors can have more standardized guidance and relevant reminders when using big data auditing in various audit business links. to reduce audit risk.
Opportunities and Challenges of CPA Auditing in the Era of Big Data Essay; Photo by Amy Hirschi on Unsplash.
Essay Discussion on Business Accounting and Management Strategy of Modern Enterprises. Commercial accounting is an important part of modern enterprise management, and it is also the soul of an enterprise. It occupies a very important position in the development of an enterprise. In recent years, as my country’s reform and opening up have continued to increase, the economic and trade exchanges between China and other countries in the world have become more and more frequent, and China’s developmental economic policies have attracted more and more foreign investment. The degree of domestic enterprises participating in the market competition has also increased significantly.
Here are the articles to explain, A Brief Discussion on Business Accounting and Management Strategy of Modern Enterprises Essay.
Modern enterprises have shown signs of diversified development in cross-industry, cross-ownership, and cross-domain aspects. Which greatly promotes the vigorous development of modern enterprises in my country. In such an era background, the traditional accounting management system appears to be unable to meet the needs of the market economy development, and various problems have also appeared in the actual enterprise management. Modern enterprises are faced with the dual pressure of domestic and international competition.
How to maintain long-term and stable development in the market competition. And how to make the business accounting management system a powerful driving force for enterprise development have become important issues that modern enterprise management has to face and solve. . After my country entered the WTO, cooperation with other countries in the fields of economy, technology, culture, and politics has gradually increased. Our country’s open economic policy has attracted a lot of foreign investment, and multinational enterprises. And Sino-foreign joint ventures have sprung up like mushrooms after a rain.
This favorable economic situation provides a rare opportunity for the development of domestic enterprises. But it also makes domestic enterprises face huge challenges. They have to face the pressure of domestic market competition and seize a place in the international market. Therefore, to achieve long-term development in today’s market environment, modern enterprises must continuously improve and innovate in all aspects of enterprise internal management. As the core content of modern enterprise management, the commercial accounting system should also take corresponding management measures. . This paper analyzes the relevant content of modern enterprise commercial accounting. And proposes relevant measures to improve modern enterprise commercial accounting management.
An overview of business accounting management
In modern enterprise management, the accounting management system undoubtedly occupies an extremely important position. It controls the economic lifeline of the enterprise and is indispensable. And important content in the process of production, operation, and development of the enterprise.
Commercial accounting management refers to systematic, continuous, comprehensive, and comprehensive reviews. And the recording of the capital in and out of enterprises through capital statistics, double-entry bookkeeping, accounting, and currency measurement. And other methods are based on the development of modern commercial enterprises. , supervision, and internal economic management activity. Also, a professional knowledge system to improve the economic benefits of the enterprise.
Commercial accounting is mainly aimed at commodity circulation enterprises. It conducts accounting and management through the purchase, sale, and storage of circulating commodities escorts the commodity circulation of enterprises, and achieves the purpose of serving enterprise management.
The characteristics of business accounting management
The support type of business accounting management in modern enterprise management
In the various experience activities of modern enterprises, capital management is an extremely important link. It is the economic basis for enterprises to carry out various business activities. And the capital management and financial management of enterprises must be established based on various business activities of the enterprise. It must also be based on the business activities of the enterprise. The two are interrelated and inseparable. From this aspect, business accounting management provides important support for the management and development of modern enterprises.
The dynamic nature of business accounting management in enterprise management
The ultimate purpose of business accounting management is to improve the economic effect of the enterprise. And promote the long-term and stable development of the enterprise. It essentially serves the management and development of the enterprise. Today, with the rapid development of the market economy, modern commercial enterprises are faced with dual pressures from home and abroad, and must constantly improve their management. Therefore, business accounting management must also continue to innovate and reform and make reasonable decisions for the development of enterprises from a long-term perspective. planning, to realize the dynamic management of business accounting for enterprises.
The fullness of business accounting management in enterprise management
As an important part of modern enterprise management, business accounting management is not an independent individual. It has a close relationship with enterprise leaders, management, and various functional departments. From a horizontal perspective, business accounting management is inseparable from the cooperation and support of various departments of the enterprise, and it also plays an important role in all aspects of enterprise management. From a vertical perspective, business accounting management requires close unification and coordination among managers of financial departments, various staff, and enterprise managers. Therefore, commercial accounting management has a strong hospital-wide character in the operation and management of modern enterprises.
Reciprocity of business accounting management in enterprise management
At different stages of enterprise development, the accounting management system has different support for enterprise development, and there are also great differences in the way it acts on enterprise management. However, fundamentally speaking, the subjective wishes of enterprise managers are to improve the economic benefits of the enterprise and maintain the long-term and stable development of the enterprise, especially in the face of financial risks, the importance of business accounting management is more prominent, it needs Reciprocal responses to various financial risks.
The important position of commercial accounting management in the process of modern enterprise management
Business accounting management can escort the development of modern enterprises at different stages
In the early stage of enterprise development, the biggest problem faced is the problem of capital and production. The focus of business accounting management is also on fundraising and ensuring the smooth development of the production and operation process; in the mature stage of enterprise development, business accounting management can be used to a large extent. To ensure the safety of enterprise funds and improve the economic benefits of enterprises; even in the recession period of enterprises, business accounting management can make reasonable plans for the future development of enterprises and promote the transformation of enterprise management strategies.
Business accounting management is an important part of modern enterprise management decision-making
In the process of business development, enterprises will face various opportunities and risks. How to seize the opportunities to promote the long-term development of the enterprise. And how to face the challenges and minimize the risks of the enterprise, enterprise managers need to make scientific and reasonable decisions. The decision-making resolutions guide the future development of the enterprise. In these decision-making decisions, business accounting management is undoubtedly the most important content. Only by ensuring the safe and reliable operation of the funds of the enterprise can it escort the development of the enterprise.
Business accounting management is consistent with the management characteristics of modern enterprises
The ultimate goal of modern enterprise management is to improve the economic benefits of the enterprise and promote the long-term development of the enterprise. Inside the enterprise, the production system, marketing system, personnel system, and financial management system are the most important links. Modern enterprises will make different management strategy adjustments according to different era backgrounds in their operation and management so that the management of enterprises can better meet the needs of the market, and the dynamic management of business accounting also makes it consistent with the management of enterprises themselves.
Business accounting management is a necessary means to improve the competitiveness of enterprises and promote the development of Business accounting management is the core link of enterprise operation and development and is also an important guarantee for escorting enterprises at all stages. With the continuous development of society and the economy, the opportunities and challenges faced by modern enterprises in the process of operation and management continue to increase.
To maintain strong competitiveness in the market competition, enterprises must use commercial accounting management to put forward scientific and reasonable plans for the development of enterprises; In addition, with the continuous influx of foreign-funded enterprises, enterprises must maintain sufficient vitality and competitive advantages in the external market while facing competition in the internal market. From this point of view, the role of business accounting management is particularly important. It is also a necessary means to promote the long-term development of enterprises.
Business accounting management strategies based on modern enterprises
Improve the financial management system and department functions of the enterprise
In the process of operation and development of modern enterprises. The operation of commercial accounting management is inseparable from. The support of relevant financial management systems and the due diligence of financial departments. In the process of enterprise development, it is necessary to continuously improve the financial management system to provide a scientific basis for commercial accounting management. In addition, the financial department must actively perform its functions. So that commercial accounting management can provide solid backing for the development of the enterprise.
Improve the team building of enterprise financial management personnel
The financial department is the core department of a modern enterprise. And the comprehensive quality of financial personnel directly affects the efficiency of enterprise accounting management. Therefore, modern enterprises should continuously improve the comprehensive quality of financial management personnel through various means, and make them realize the importance of their responsibilities. In addition, enterprises should vigorously cultivate and introduce professional financial technical personnel to continuously inject fresh vitality into the financial system of the enterprise and to continuously improve the overall quality of the financial personnel of the enterprise.
Maintain a balance between corporate profits and liabilities
In the production and operation process of an enterprise, profit is the main purpose. But if there is profit, there will also be debt. This is inevitable, and once the balance between the two is broken, it will hurt the development of the enterprise. However, we can maintain the balance between the two at a relatively scientific, reasonable. And safe level through a series of means of business accounting management, to ensure the smooth progress of the production and operation of the enterprise.
Strengthen the control and supervision of the financial system within the enterprise
The financial department of an enterprise is a relatively independent special department, which controls the economic lifeline of the enterprise. Therefore, in the process of enterprise development, it is inevitable that there will be vicious phenomena. Such as the use of power for personal gain, the misappropriation of public funds, and the misappropriation of public funds. bad influence. Therefore, modern enterprises should strengthen the control and supervision of the financial management system, and promptly remove all kinds of financial hidden dangers that endanger the production and operation of the enterprise to ensure the smooth progress of financial management.
Improve the anti-risk ability of the enterprise financial system
Enterprises will encounter various difficulties and risks in the process of production and operation. Which greatly affects the development of enterprises. Based on this, the ability to resist the risks of enterprise finance is extremely important. Therefore, modern enterprises should continuously improve their financial anti-risk ability. Make various anti-risk plans, and take established measures to solve various risks in an orderly manner. To ensure the safe and stable development of enterprises.
Expanding the source of enterprise funds Enterprises need a lot of funds as support in the process of development. And the lack of funds and follow-up shortages will seriously affect the long-term development of enterprises. However, it is not enough to rely solely on the support of external funds. Enterprises should constantly improve their internal financial hematopoietic mechanism. Expand the source of funds for the enterprise, and continuously provide sufficient funds for the development of the enterprise.
Conclusion
With the continuous development of the market economy, modern enterprises will face more and more challenges. To maintain sufficient competitiveness in the market competition, enterprises must continuously improve their management systems and improve the scientific and reasonable decision-making of enterprises. To achieve these, business accounting management is an indispensable means, which can maximize the utilization efficiency of enterprise funds and resources, improve the economic benefits of enterprises, and thus promote the long-term and stable development of enterprises.
A Brief Discussion on Business Accounting and Management Strategy of Modern Enterprises Essay; Photo by Tyler Franta on Unsplash.
The article Discussion of Commercial Accounting Informatization Construction Essay PDF. With the continuous acceleration of social development, the level of modern information technology has also stood gradually improved. And the construction of accounting informatization stands the most concern. Because it is directly related to whether the economic activities of the industry can carry out smoothly. And can solve the problems existing in the process of enterprise development. At the same time, the construction of accounting informatization is also an inevitable trend of healthy and sustainable development of the modern industry, which needs the attention of leaders.
Here are the articles to explain, A Brief Discussion on the Informatization of Commercial Accounting Essay PDF.
This pdf essay conducts in-depth research on commercial accounting informatization, and then fully implements and implements the construction of accounting informatization, injecting a steady stream of energy into the development of the industry. Accounting informatization construction is a comprehensive project, which mainly refers to the integration of accounting and information technology, and is also the key to meeting the development needs of various economic activities of enterprises.
Nowadays, the reform of the market economy system continues to deepen, and the trend of competition among all walks of life is gradually increasing. To promote the smooth progress of informatization construction, it is necessary to formulate feasible plans based on the actual situation, and it is also necessary to inject vitality and vitality into the development of enterprises. To ensure the healthy and sustainable development of the enterprise.
First, the concept and connotation of accounting informatization
Accounting informatization refers to the effective integration of accounting and information technology, which is a key link in the current enterprise development process. Due to the expansion of the industry development scale, the competition trend is gradually increasing. Therefore, to specific requirements under the new economic system, the relevant leaders need to pay attention to the construction of accounting informatization, and continuously improve the comprehensive market competitiveness of enterprises. Furthermore, accounting informatization can also solve the problem of isolated islands in the previous accounting computerization, thereby promoting the healthy development of other economic management activities.
The connotation of accounting informatization needs to analyze through the following contents:
First, the so-called accounting informatization refers to the use of internal accounting information as an information resource for economic management by an enterprise in the process of production management, and the staff needs to use advanced computer equipment processes the data information.
Second, the times are developing, and the speed of industry development is gradually increasing. Strengthening the construction of accounting informatization can ensure that the management level improves. And promote the development of accounting management in a standardized direction. This method is different from the traditional method, because of the construction of information technology The effect obtained is more significant, which can promote the development of enterprises in the direction of information management.
Second, the main characteristics of accounting informatization
(1) Universality
Accounting informatization has many characteristics, of which universality is a more prominent feature, and accounting informatization itself effectively integrates accounting and information technology and is also an important part of modern industrial economic activities. For example, it includes accounting work, accounting management, and accounting education. Therefore, in the actual accounting management process, leaders can only promote the smooth progress of their management work if they master the characteristics of accounting informatization.
Furthermore, traditional accounting management lags in, which may cause the construction of accounting informatization to stagnate. With the development of modern society, managers have also begun to realize the importance of strengthening the construction of accounting informatization and taking measures. A certain method will implement and carry out the construction of informatization, to its universal value.
(2) Integration
Integration is an important feature of accounting informatization, and accounting informatization mainly refers to rearranging traditional accounting organizations to further lay a good foundation for enterprise development. At the same time, accounting involves a relatively large number of fields. Therefore, to need social and economic development, we must also pay attention to the construction of accounting informatization. Specifically, the following links should be done well.
First, managers need to closely link finance and management work. This is very important, can obtain satisfactory accounting informatization construction effect, and can create good conditions for the vigorous development of enterprises.
Second, in the process of informatization construction, enterprises also need to use external forces to optimize management. For example, advanced computers and other equipment can be introduced under the premise of economic conditions, to the work pressure of staff. Which also helps to ensure the relevant quality of data information.
Third, promote the smooth development of accounting informatization construction and lay a solid foundation for the subsequent development of the enterprise.
(3) Dynamic
In addition to the above features, the construction of accounting informatization has a more prominent feature, namely dynamic, which we can also call real-time or synchronicity. Accounting management is an important part of enterprise development, and it is required to ensure that it can In order Toirm foothold in the era of high competition pressure, we must pay attention to informatization construction.
Due to the dynamic nature of informatization construction, relevant leaders need to improve. Their sense of responsibility in the process of actual accounting informatization management and do a good job with due diligence. It is necessary to comprehensively analyze and organize relevant data information, to the accuracy of data information. And bring data support for the decision-making work of decision-makers.
At the same time, to the hands of personnel, enterprises should also introduce modern technical software to assist work. Such as using accounting information systems, so that data processing can be carried out in real-time. In addition, enterprises can also collect accounting data to lay a good foundation for the development of subsequent economic activities. The staff can calculate and update the data according to this feature. Through data analysis, they can g the current management situation of the enterprise.
(4) Progressive
With the development of modern society, the level of scientific information technology has also been greatly improved. And the construction of accounting informatization has also attracted people’s attention. Which can be said to be crucial to the development of the industry.
First of all, information technology itself can play a role in promoting the reorganization of the accounting model. The staff should establish an accounting-based accounting information system based on the actual situation. Guide personnel at all levels to strengthen accounting management according to the system. And further, implement the application of information technology. value comes into play.
Secondly, managers should also find other ways to promote the development of informatization construction. For example, modern high-tech means can be used to improve the level of informatization construction in an all-around way, and at the same time. It can also promote the development of other economic activities in the industry.
In addition, modern technical means can also be used to provide digital and informatization support for accounting decision-makers to ensure the smooth progress of informatization construction. Also, may like to read Thinking of Accounting Firms for Small Business.
PDF Research on Commercial Accounting Informatization
(1) Deepen the understanding of commercial accounting informatization
Commercial accounting informatization involves a lot of pdf content. Therefore, to develop the needs of all walks of life. It is necessary to enhance the understanding of commercial accounting informatization of personnel at all levels. It is mainly a work mode formed by breaking through the constraints of manual accounting. The subsequent economic activity of the industry is crucial. In recent years, the development of the industry also needs the support of modern high-tech. And it is necessary to pay more attention to the construction of informatization.
More importantly, it is necessary to increase the attention of personnel to the construction of informatization. And actively participate in the relevant management work, thereby helping enterprises to obtain high economic profit. At the same time, accountants should use modern technical means to promote the smooth progress of accounting informatization construction.
The application of technical means can make up for the loopholes in traditional management forms. Thereby promoting the smooth development of accounting informatization construction. And ensuring the healthy development of other economic activities of the enterprise. In addition, accounting informatization also has many characteristics, such as universality and integration. So enterprise managers should also formulate feasible plans according to their characteristics to promote the construction of informatization.
In particular, leaders should lead by example and strive to improve themselves. And constantly learn advanced work concepts, to the smooth progress of accounting informatization construction. In addition, in view because of the comings in the construction of accounting informatization. It is also necessary to optimize and adjust in time and promptly implement. And carry out the construction of accounting informatization as much as possible. To toe with the development of the times and continuously improve Comprehensive market competitiveness and maximize profits.
(2) Strengthen the training of compound accountants
Since the reform and opening up, the development scale of all walks of life has gradually expanded. At the same time, the types of internal business projects are also changing. To need their account informatization construction, enterprises need to strengthen the training of compound accounting talents. Because talent is an important part of the smooth development of economic activities. If the overall quality and ability of internal personnel are low. It will be difficult to meet the needs of their information construction, and it will also restrict their event. Therefore, it is very important to pay attention to the cultivation of compound talents.
First, enterprises need to pay attention to internal personnel training. Especially to strengthen the training of accounting personnel, and continuously improve their workability and business level. Because the level of personnel ability is related to the effect of accounting information construction. Of course, it is necessary to raise the threshold when recruiting personnel in the early stage, to further ensure that the abilities of the recruited personnel can meet the requirements of accounting informatization construction, and to truly improve the comprehensive management level and develop in a better direction.
Second, accountants should apply modern information technology to give full play to the value of modern technology. Which is very critical for the future development of enterprises.
Third, to construct accounting informatization, enterprises can also hire some professional personnel from outside to participate in the construction of accounting informatization. Because such personnel themselves have received higher education, their abilities and qualities in all aspects are generally relatively high.
Fourth, promote the healthy development of commercial accounting informatization construction by strengthening the training of compound technical personnel.
(3) Guaranteeing the authenticity and sharing of financial data
Through the above introduction, pdf we have learned that the progress of commercial accounting informatization construction has been affected in the past due to the influence of various factors. Therefore, to develop the needs of the industry. It is necessary to take effective measures to promote the construction of accounting informatization.
First of all, enterprises need to take certain measures to improve the quality of financial data. Only by guaranteeing its authenticity can it promote its own healthy, vigorous, and stable development. And it will not hinder the development of other economic activities. Therefore, leaders must ensure the authenticity of financial data and information. At the same time, staff at all levels should also understand the importance of accounting informatization construction, and be good at completing informatization construction tasks with the help of advanced information technology. Manage tasks.
Secondly, it is necessary to take countermeasures to deal with the difficulties encountered in the process of informatization construction. To timely ensure that enterprises can improve their comprehensive strength in the context of the rapid development of modern information technology.
Nowadays, the construction of accounting informatization is also inevitable for the sustainable development of modern industry. Trend, for this reason, it is necessary to use technical means to ensure the authenticity and sharing of financial data. In addition, in the process of accounting informatization construction, managers must constantly summarize work experience, strengthen internal control management, and further improve the accounting management level on the original basis. The emergence of problems such as leaks, in this way, can meet the actual requirements of the construction of accounting informatization.
Conclusion
To sum up, on pdf the construction of commercial accounting informatization is very important for the development of the industry. The construction of accounting informatization is relatively comprehensive. It is necessary to master its characteristics and formulate feasible plans to promote the smooth development of informatization construction. It is necessary to enhance personnel’s understanding of commercial accounting information. And strengthen the training of compound accounting talents. It is also necessary to ensure the authenticity and real-time sharing of financial data, to the value of informatization construction, and at the same time. It can also lay a solid foundation for subsequent accounting management work. foundation, and promote enterprises to stand out in the unpredictable market economy system.
Discussion of Commercial Accounting Informatization Construction Essay PDF; Photo by NORTHFOLK on Unsplash.
Modern Management Accounting; Over the last two decades, managerial accounting has developed as a practical tool for executives and as a topic for academic education and research; Thus, managerial accounting states that “It is the process of identifying, measuring and communicating economic information that enables informed judgments and decisions of information users”. Managerial accounting plays a very important role; where it gives the manager enough time and relevant information and sets goals, monitors performance; and systematically improves the efficiency and effectiveness of the organization in achieving goals. . within the organization.
Here are the articles to explain, Modern Management Accounting Discuss, Definition, Role, techniques, and TQM!
To bring our history of management accounting closer to date, developments since 1975 have identified an information and reporting system that affects individuals. Although managerial accounting developed in the fourteenth century, with the principles of financial accounting and bookkeeping, business accounting and small business owners did not practice it before the Industrial Revolution. In the nineteenth century, new accounting methods developed when entrepreneurs began hiring people on a long-term basis, investing capital, and introducing more complex technologies.
Definition of Modern Management Accounting;
“Critically discuss the role of modern management accounting and the extent to which it shapes, or is shaped by, the changing organizational and global context within which it is practiced”.
“Concerning relevant literature, critically evaluate the effectiveness of Three recent developments in management accounting techniques, within specific organizational or national contexts of your choice (e.g. Manufacturing or Service Sectors, Advanced or Emerging Economies)”.
Concerning the relevant literature, there have been few recent developments in management accounting techniques within the manufacturing and service sectors. The practice of modern management accounting is different from traditional accounting. The recent developments enable managers to make sound decisions to minimize cost; as well as at the same time add value to the products and services by improving the quality of products; which is required by the customers and reducing waste.
However, the pendulum swung in the other direction over the next decade as an effect of new “Techniques” in the management accounting area. Activity-based costing (ABC), Just-in-time (JIT), and Total-quality-management (TQM) have been developed to update the traditional accounting model so it adequately reflects today’s manufacturing environment.
Role of management accounting;
The relation between accounting and management has been commonly expressed by the phrase, “Accounting is a tool of management”. Accounting practice has developed in response to a changing business economy. Because of these changes, effects have been made to clarify, redefine, and seek acceptance of accounting doctrine and practice.
Management accounting systems (MAS) are recognized as providing a most important source of journal information in organizations, a source of power deriving from the possession of that information, and a means for distributing that power and managing the organizational system.
The direct impact of organizational changes on the different roles of management accounting is difficult to measure. The changing role of management accounting becomes evident through the substantiation of management accounting. Pointed out that the role of management accounting consists of;
Direct attention:
This means providing full information to specific situations e.g. Where the problem occurs, and who creates a loss. In the highly competitive market, this role alerts the manager about competitors’ information such as their strategy, and new products.
Keeping the score:
This role aims to answer the questions: how much and how many. (How much implies those things is related to allocation and the share of costs within the whole organization, and how many refers to the number of inputs that will be used). In strategic management, the answer to those questions may be extended; such as how much the market share, is and how many compared to the competitors.
Solving the problems:
Management accounting is a good channel for managers to provide the nearest relevant methods for solving the subsisting problems. Due to M/A, the manager can collect all detailed information about the problems such as what causes them, and when it starts and then based on that information, several answers will be provided and the task of a manager is to choose the most appropriate one.
Comparison of Traditional and Modern management accounting;
During the 1950s and 1960s, accountants gradually discovered that product costs; which had been constructed for financial reporting purposes, were being taken seriously by operating executives. In the late 1960s and early 1970s, management accounting thought developed that attempted to subsume the two previous approaches into a broader conceptual framework.
Historical and contemporary studies of accounting have shed light on the diverse ways in which accounting has been and is been implicated in a wide range of activities and social arrangements. Accounting cannot be understood simply concerning its supposed functional properties because it stands implicated in shaping its context.
This said much of the evidence to date suggests that, in practice, traditional management accounting techniques remain popular. However, it appears also that such traditional techniques stand used alongside new and ‘advanced’ accounting techniques, such as ABC, JIT, and TQM.
Management accounting stands used to help managers make solid business decisions. Because of the revolution in management accounting, both the smallest corner stores and largest multinational organizations start their innovation in their accounting perspective.
Successful organizations adapt to changes in their environment and proactively change their environment. Management accounting should help organizations recognize the need for initiating change and suggest the appropriate response to an environmental change.
Change in Global/ Organisational context and management accounting;
Since 1975 important changes have taken place in the context of political, economic, and social settings. Management accounting faces a few challenges over environmental changes as well as an internal process within organizations. Therefore, management accounting must respond to these changes by adopting new techniques and concepts.
The measurement of costs:
By using modern management techniques, the value and profitability of information services can generate.
The birth of “hybrid” accountants:
As a result of new forms of organizations and requirements of strategic management accounting (SMA). SMA links performance measurement systems with corporate vision and strategies.
Open-book accounting:
These techniques are an important part of outcome control measurement for companies in inter-organizational relationships; which are another result of increased globalization.
In discussing the nature of settled habits of thought and action Hodgson, defined habits as more or less self-actualizing dispositions or tendencies to engage in previously adopted or acquired forms of action.
A strategy of change provides a critical appraisal of current ideas about “organizational culture“, “total quality management“, “flexibility”, and “excellence”. Dealing is an integrated way with the full spectrum of survival in today’s changing environment.
Characteristics of manufacturing and service sectors;
Much of the literature on international business has taken on a manufacturing perspective. The recent literature has paid attention to the internationalization of service firms.
Characteristics of service production.
Intangible output.
Customized output.
Labour intensive.
Manufacturing Orientations in Service firms.
Physical goods as a component of a service package.
Manufacturing logic in back-office service operations.
Deprofessionalization of service production and delivery.
Service Orientations in Manufacturing Firms.
Component of the product.
Element of product strategy.
Characteristics of manufacturing production.
Tangible output.
Standardized output.
Technical care buffered from the customer.
The conflict between manufacturing and service sectors.
The center box exhibits orientations among manufacturing and service sectors. Also, The right box exhibits the features of the manufacturing firms and the left box exhibits the features of the service firms. Manufacturing firms, particularly those with diversified product lines, have a good deal more flexibility and control than extractive investors; they may be able to exercise considerable choice in their response to host country demands.
The continued growth of service sectors in almost all the developing economies has fascinated and occasionally alarmed economists and other observers. Why is the problem more serious in some of the service sectors? Partly it is a data problem, importantly, it is a conceptual one. Both manufacturing and service company managers need operational control systems that will enhance the cost-improvement, quality-improvement, and process-time reduction activities of their employees.
Management accounting techniques:
The following Three techniques below are:
Activity-Based Costing (ABC);
“Activity-based costing is a method that is projected to provide managers on cost information for strategic and other conclusions that potentially affect the capacity and therefore fixed costs”.
Benefits related to activity-based costing (ABC) are many. In ABC, the aim is to understand the overhead and profitability of the products and customers. ABC works mainly in the large cost drivers related to a decision to be sure of or a process being studied.
In developing countries, the manufacturing industries started adopting new techniques, to maintain the relationship between market development and technological innovation to archive long-term success. Seemingly, ABC developed as an accounting technique to provide applicable information for advanced manufacturing firms producing various products in a competitive environment.
Whilst the thoughtfulness, ABC as yet focused on manufacturing firms, ABC can be useful to a few service organizations. There are few very disputes among the manufacturing and service sectors. Manufacturing firms execute similar types of activities; however, there is a slight similarity between the activities of an insurance firm, a hospital, and law firms. The service sector is less tangible and, harder to define.
In developed countries like the UK, when the survey of ABC took place for nearly 1000 companies, the result indicated that even after adopting ABC; it has stood rejected by a healthy number, and the majority of the companies have to still decide on its use.
As cost driver and ABC concepts improve the measurement of costs and allocation of information for service departments within manufacturing firms, service firms such as accounting/law firms could also use cost driver and ABC concepts.
Just-In-Time (JIT):
“JIT is a process which is capable of instant response to demand without the need for any overstocking, either in exception of the demand being forthcoming or as a result of inefficiencies in the process”.
Under certain circumstances of the JIT concept, a company maneuvering a JIT system would buy only enough raw materials each day to meet that day’s need. JIT manufacturing scheme calls for making a good or service only when the customer, internal or external needs it. JIT manufacturing is simple in theory, however, one had to practice. ”Keeping everyone busy”, is another characteristic of conventional manufacturing.
JIT has many advantages, for eg,
“An American standard uses cell manufacturing to cut inventories and reduce manufacturing time. The result is a breakthrough in speed. Manufacturing a pump now takes six minutes than two weeks”.
JIT production process and the manufacturing effectiveness ratio for manufacturing operations apply to service companies too. The service delivery process is even more important than in manufacturing companies. Eg. In the banking industry, the process of gaining approval for a mortgage on a house that we like to purchase needed 26 days, and after applying the JIT process they just need 15 min.
Total Quality Management (TQM):
“TQM is the most popular approach to a continuous improvement. Its major characteristics are to focus on serving customers and the systematic problem-solving team made up of front-line workers”.
A few thousand companies have existed involved in TQM and similar programs. For a business, the major driving force is the element of competition. The competitiveness of suppliers stands determined by the quality of its product or services. Most manufacturing companies adopt TQM, either to improve the work atmosphere for the employees or to help improve the profits of a company. “Penril Datacomm is a Maryland designer and producer of data communications equipment. Before TQM the defect rate of the company was high.
Applying TQM techniques resulted in an 81% decrease in defects, an 83% decrease in failures, and a 73% decrease in first-year warranty repairs”. The concept and tools of service began with Thomas Peters and Robert Waterman’s “In Search of Excellence”, to achieve customer satisfaction, service companies such as Disney Corporation and SAS Airlines adopted TQM. TQM in education as a business is difficult.
What is Modern Management Accounting? Discuss; Image by Megan Rexazin from Pixabay.
Reload document 
Open in new tab 
