Accounting fraud

The American Institute of Certified public accountants define “accounting” as “the art of recording, classifying, and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of financial character, and interpreting the results thereof”. To put it simply, this activity involves logging of financial data, and analyzing the trends to predict future business outcomes.

Of late, many well known companies such as Sunbeam and Enron Corporation have been found guilty of financial fraud, causing companies to review their accounting standards, and auditing techniques. The Enron Scandal was the direct cause of the passing of a new act, the Sabranes-Oxley act, which severely increases the penalty an organization must incur, when it is found guilty of fraudulent behavior.

Imperative Accounting: For every business

Accounting makes a business run smoother. It is the most efficient way of running a business and without which a business house will just be a center of chaos. Accounting enables the authority to keep its workers records, record it financial advancement, the incoming and outgoing of the business, the remunerations of its workers- most importantly it records the financial position of the business house.
This knowledge becomes very important because based on the financial status of a firm, the authority decides its future plans and policies. Accounting also keeps the businessman updated about the latest trends and policies in the market. It is with this knowledge that the particular firm makes flexible changes to cope up more efficiently.

Accounting: essential for every business

Accounting is not a choice but a necessity for every business irrespective of its size. Accounting is basically recording, classifying, analyzing and reporting the financial data of a firm. Every firm, be it big or small needs their money to be managed in order to keep a track of their capital. Some people decide to do the accounting chores all by themselves and while some other hire professionals to do the same. Modern day accounting tasks can also be done with the help of accounting software. This software can easily be found in the market. There are many different kinds of accounting which depends on the size and structure of the group that is using it. In all, any business will cease to exist without the helping hand of accounting.