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INTERFACE OF ACCOUNTING

AND FINANCE WITH


MARKETING

SUBMITTED BY
GULVEEN KAUR
RESEARCH SCHOLAR
MEANING OF FINANCE

Finance refers to management of large amounts of


money, especially by the government and large
corporations
MEANING OF ACCOUNTING

 Accounting is systematic and financial transactions


pertaining to a business

 It is the process of summarizing, analyzing and


reporting theses transactions to oversight agencies,
regulators and tax collection entities
FINANCE AND ACCOUTING

 The firm’s finance and accounting activities are


under the control of chief financial officer
 In small firms finance function is carried by
controller
 In large firms accountants are closely involved in
finance activities
 Accounting uses accrual concept
 Finance uses cash system which is under control of
chief financial offficer
FINANCE AND MARKETING

 There are some important decisions which have to be


taken by the marketing manager
 There are cases where he would need the help of
financial management department to know about
the profitability of the firm
 Financial management department helps in taking
decisions such as Advertising, Pricing, Inventory
management ( FIFO and LIFO)
MARKETING – FINANCE INTERFACE

 Innovation  Firm value


 Brand Equity  Stock returns
 Corporate social  Systematic risks
responsibility  Liquidity risks
 Supply chain relations  Cost of debt
 Strategic alliance
 Customer satisfaction
EXAMPLES FROM RESEARCH PAPERS

 Rao, Aggarwal and Dahlhoff (2004) study ‘ How


branding strategy affects firms value”
 Corporate branded firms have higher firm value than
average firms
EXAMPLES FROM RESEARCH PAPERS

 Luo and Bhattacharya (2006) argue that


Corporate social responsibility

Higher customer satisfaction

Increases the shareholder value


EXAMPLES FROM RESEARCH PAPERS

 Berk, Green and Naik (2004) say that research and


development leads to increase in the risk of the firm
THANK YOU