Table of contents

INTRODUCTION

Corporate accounting is one of the important parts of the production and business activities of the
enterprise. The planning system is an integral part of the business. Accountants provide information
about financial activities to the leadership of the business including those outside the business.

And this blog will clarify information about corporate accounting and the role of planning activities in
the business.

I. Overview of accounting functions in the business

1. Definition of accouting:Is an information system that identifies records and communicates the
economic events of can organization to interested users.(Weygandt, Kieso and Kimmel) [btecslide, 2022]

Example: The accounting department of company A has prepared a report on net revenue in the third
quarter of 2021 to report to the management.

2. Functions of accountants:

Accounting has three main functions: [btecslide, 2022]

 Identifying Business Activities(Select transactions

& events)
 Recording Business Activities(Imput, measure, classify)
 Recording Business Activities(Prepare, analyse, interpret)

The purpose of the accounting function: Accounting always aims to provide the most necessary
information about the economic and financial situation of the business to the leadership.

3. Classification of different accounting disciplines and users of accounting information itself:

Types of accouting:
[btec slide, 2022]
*Main subjects using accounting information:

Internal users: Internal users use a mix of management and financial accounting information. Some
internal users of accounting information and their needs are briefly discussed below:

 Managers
 Officers
 Internal Auditors
 Sales Staff
 Budget Officers
 Controllers

External users: External users normally use only financial accounting information. Some external users
of accounting information and their needs are briefly discussed below:

 Lenders
 Shareholders
 Governments
 Consumer Groups
 External Auditors
 Customers

II. Prospects and relationships between accountants and businesses

1. Career opportunities of accountants:

Career Opportunities in Accounting: Accounting is a fast profession that requires a high concentration
and honesty and the career opportunities of accountants are diverse and attractive.

[btec slide, 2022]

Skills and competencies of accounting: Accountants analyze and prepare financial records for
organizations and individual clients. However, on-demand accounting skills vary depending on the
specific job title. For example, notarized accounting specialize in tax forms, balance reports, and other
forms of financial documentation that their clients must legally disclose. This role requires precision,
analytical skills and strong ethics.

[btec slide, 2022]

Ethics in Accounting:

Five fundamental principles of ethics in accounting:

 Integrity
 Objectivity
 Professional competence and due care
 Confidentiality
 Professional behaviour

[btec slide, 2022]

The roles and responsibilities of accountants:

Although the day-to-day tasks of the accountant will vary depending on the location and organization,
some of the most common tasks and responsibilities of accounting include:

 Ensure the accuracy of financial documents as well as compliance with relevant laws and
regulations.
 Prepare and continue to maintain all important financial statements.
 Make a tax return and make sure that taxes are paid on time and on time.
 Evaluate financial performance to propose best practices, identify problems, and strategize
solutions, and help organizations function effectively.
 Provide guidance on reducing costs, raising revenue and maximizing profits.

2. Relationship between accountants and other functional departments in the enterprise :

Accounting with the work of planning, collecting and information related data about finance in the
business. So it is clear that in the activities of different functional departments that use finance to do it,
it is necessary to accountant:

Accounting and marketing: The planning and marketing department has a close relationship in
providing and declaring expenses. For example, in the third quarter of 2022, Vinamilk launched new
products and needed marketing to promote products, the Marketing department used the cost from the
finance department to carry out promotional activities for the company. The accounting department is
responsible for collecting, listing and exporting all information about marketing expenditures to ensure
transparency and publicity for the business.

Accounting and HR management: The accounting department and human resources department have a
relationship in the pay and remuneration of employees. For example, at the pay period for employees,
the human resources department is responsible for managing, ensuring that employees work on
schedule and the accounting department collects, lists and prepares payroll reports of employees by
month, quarter, year.

Accounting and manufacturing: To produce products, it is necessary to use different amounts of capital
and the examination and summary of expenditures so that the business can easily grasp the loss of
capital. For example, enterprises need to produce a batch of export seconds needing VND30 billion to
implement. Capital is spent in different positions and the accounting department needs to collect and
make financial statements for the business.

Accounting and sale: Sales is the task of the sales department and the sales department has a close
relationship with the design. For example, the sales department sold 300 million VND of various
consumer items. The accounting department is responsible for monitoring, collecting and preparing
financial statements to inform superiors.

Inferring, the combination of planning and other functional parts of the business is inseparable and it
determines the success of the wishes, plans, goals of the business.
III. Financial management and accounting accounting

1. Definition, Purpose and Scope:

Management accouting: Management accounting, also called managerial accounting or cost

accounting, is the process of analyzing business costs and operations to prepare internal financial
report, records, and account to aid managers’ decision making process in achieving business goals.

[ myaccountingcourse, n.d]

For example, determining how much your business should charge for a new product and analyzing
the level of revenue a future product line can generate are all examples of business issues in the
field of management accounting.

Purpose: The main purpose of this type of accounting is to support the decision-making process in
relation to all aspects of the business operation.

Scope: Management accounting is broad in scope and is divided into several categories including:

 Expenses
 Financial accounting
 Budgets and forecasts
 Data interpretation
 Financial management
 Management reports
 Analysis of financial statements
 Inflation accounting

Financial accounting: Financial accounting is the process of preparing financial statements that
companies use to show their financial performance and position to people outside the company,
Including investors, creditors, suppliers, and customers.[ accountingedu.org, 2021]

For example, information about the situation and fluctuations in capital, assets or physical and
monetary flows will be compiled by the financial institution through relevant data.

Purpose: The main purpose of financial accounting is to provide the most accurate and practical
information to businesses and stakeholders.

Scope: The scope of Financial Accounting includes the following factors:

 Records Financial Transactions

 Classify And Summarize Information
 Prepares Financial Statements
 Interprets Financial Information
 Communicates All Outcomes
 Determines And Maintains Financial Position

IV. Constraints and threats to businesses from regulatory disclosures and accounting principles

1. Concepts and principles of accounting regulations (GAAP, IFRS):

GAAP(Generally Accepted Accounting Principles) from Financial Accounting Standard Board (FASB): is a
collection of commonly followed accounting rules and standards for financial reporting.[Techtarget, n.d]

*10 Principles of GAAP:

- Regularity
- Consistency
- Sincerity
- Permanence of Methods
- Non-Compensation
- Prudence
- Continuity
- Periodicity
- Materiality
- Utmost Good Faith

International Financial Reporting Standards (IFRS) from International Accounting Standard Board
(IASB): are a set of accounting rules for the financial statements of public companies that are intended
to make them consistent, transparent, and easily comparable around the world.[Investopedia, n.d]

In GAAP, acquired intangible assets (like R&D and advertising costs) are recognized at fair value, while in
IFRS, they are only recognized if the asset will have a future economic benefit and has a measured
reliability.

IFRS covers a wide range of accounting activities. There are certain aspects of business practice where
IFRS sets mandatory rules:

 Statement of Financial Position

 Statement of Comprehensive Income
 Statement of Changes in Equity
 Statement of Cash Flows
2. The constraints and threats to enterprises from the above regulatory concepts and principles:

If the financial statements are not made using GAAP, investors should exercise caution. Without GAAP,
comparing the financial statements of different companies would be extremely difficult, even in the
same industry, making it difficult to compare apples to apples. Some companies may report both GAAP
and non-GAAP measures when reporting their financial results. GAAP regulations require that non-GAAP
measures be identified in financial statements and other public disclosures, such as press releases.

For example, if the financial statements are inaccurate, unclear or no scratch-off is made, it will be
difficult for the business, investors or related parties to check the current state of a company.

IFRS promotes transparency and trust in global financial markets and companies that list their shares on
it. If these standards do not exist, investors will not want to trust the financial statements and other
information presented by the companies. Without that trust, we could see fewer transactions and a less
robust economy.
For example, when financial statements are established based on GAAP but without the standards and
combinations of IFRS will lead to a lack of trust and difficulty convincing investors and stakeholders when
assessing the status of a business.

3. 3. Seriously assess the role of accountants in informing decision-making to meet the needs of
organizations, stakeholders and society in complex and rapidly changing operating environments:

Cost and revenue analysis: Revenue is the money a company earns. In other words, the income of the
business is its revenue. On the other hand, its cost is what it has to pay to stay afloat. A company's
expense may include salaries and benefits for employees, rent or mortgages for its locations, and the
costs they incur for the production, packaging, marketing and distribution of its products.

Profitability is a simple formula: Reduce costs while increasing revenue. Getting accurate metrics for
revenues and costs can be complicated, and working through raw financial data to find useful metrics is
a time-consuming process. Calculating profits based on these metrics requires the accounting manager
to work closely with the company's financial accounting team, who handle the company's day-to-day
finances.

Create budgets and forecast ideas for growth: When a management accountant has accurate financial
data on the company's revenue and expenses, the actual budget for specific projects and activities
within the company can be monitored and updated regularly. These budgets are the basis for long-term
profit and growth forecasts, often providing implementable superior management ideas to drive
continuous, sustainable growth and increase profits. These forecasts are more detailed than those
generated by financial accountants, usually large forecasts. The forecast a production management
accountant, on the contrary, can be divided by division, product line or market segment.

Provide financial information for company decisions: Accounting managers give advice to decision
makers who then make changes at the company with this advice in mind. Often, accounting managers
analyze in the market resulting in raw data and metrics. An accounting manager must speak two
languages - accounting jargon and management dialect. In this role, the accounting manager translates
raw data into action advice. The accounting manager is also a liaison between the company and
investors, shareholders and other external sources. The management role of accountants, actually
appears to help a senior management team of the company take the company in the direction of
profitable development by providing important financial insights. [businessment, n.d]

For example, in the complex form of covid-19 epidemic, many businesses suffer negative growth and are
at risk of bankruptcy at any time or sustainable development, maintaining, the consideration of
investment or the implementation of new directions, check, see the financial statements from the
accounting department of the companies is the core factor for the decisions. I'm going to be coming
soon. For example, vinamilk joint stock company in the context of covid-19 has certain impacts.

In 2020, exports contributed VND 5,561 billion to the total revenue of the whole company, an increase
of 7.4% compared to 2019. In the first 6 months of 2021, in the context of the Covid-19 pandemic once
again causing the economy to struggle, Vinamilk's export activities made a strong impression when
growing in double digits, reaching VND 2,772 billion. Making investment decisions in Vinamilk now may
be the right direction.[employee newspaper, 2021] With the aviation industry, the Ministry of Planning
and Investment said that the market declined the most seriously, the demand for air transport in 2020
decreased by 34.5-65.9%, the revenue of aviation enterprises decreased by 61% compared to 2019.vThe
third COVID-19 outbreak of Tet in 2021 caused aviation revenue to decrease by 80% compared to the
same period in 2020. [Youth Newspaper, 2021]. Businesses have always had uneven development
before the Covid-19 pandemic, the identification and examination of financial revenue statements,
balance sheets for companies in particular and new organizations and investors in general is essential
for making decisions, The right directions.

Therefore, the role of accountants in the needs and decisions of businesses and organizations is very
important and necessary. In order to understand the "health" status of the business, it is necessary to
consider from the "accounting" factor.

CONCLUSION

The above analysis demonstrates the "necessity and importance" of accounting for businesses,
organizations and stakeholders. From clarifying the basic information of the phrase "accounting",
functions and roles in the organization, relationships with departments, distinguishing between
management accounting and financial accounting to the concepts, accounting principles and their
impact on the decision-making of the business. It can be said that the identification and use of
accounting information to ensure the right direction for the business. Accounting is not merely a
function that supports the business operation of a business or to support information for investors,
organizations, stakeholders. Accounting is also a separate department and has a special position in the
business, contributing to the development of the business.
REFERENCE