Discussions Assignment Example | Topics and Well Written Essays - 1000 words

Discussions - Assignment ExampleThe Enron fraud was revealed to the human beings in October 2001 and this ended up in the bankruptcy of the organization. musical composition analyzing the Enron report impropriety, it appears that the company executives exploited accounting limitations with intend to create a false view of the cash flows and to prepare a misleading dimension sheet. This inflated the profits. Fair accounting practices and proper annual describe might have prevented the Enron s undersidedal. Effect of accountancy Impropriety Although improper or illegal accounting practices may assist a firm to come along short term pecuniary benefits, such practices can have dreadful consequences on the company in the long term. Undoubtedly, accounting malpractices will reduce stakeholder confidence in attention and hence investors would be reluctant to invest in the company. This situation may adversely affect the firms overall financial per foundance. Management professiona ls opine that active stakeholder engagement in business is inevitable to improve financial performance. Hence, in order to minimize the resulting impact of accounting impropriety on the business, making timely changes to the top management team and to publish proper annual reports is essential. ... Hence, it can be stated that clerking constitutes the basic infract or starting point of the accounting process. As Banerjee (2010) states, the scope of bookkeeping is restricted to systematic and crying recording of business transactions in ledger accounts through journal. In contrast, the accounting process involves the forwardness of Trial Balance, Profit & Loss A/c, Income Statement, and Balance Sheet using accepted accounting principles. While bookkeeping is only a clerical job, accounting is an analytical job (p.4). account statement Equation Accounting equation also referred to as balance sheet equation, reflects the relationship between assets, liabilities, and owners upright ness of a business. This equation is linked to the concept that total debits equal total credits. The accounting equation can be expressed as Assets = Liabilities + Capital. As accounting equation is fundamental to the double entry bookkeeping system, it can greatly support the work of professional accountants. More precisely, this equation is the basic idea foot the preparation of balance sheet. A good understanding of this equation can assist stakeholders, particularly investors to form potential business decisions. While making business decisions, it is important to give specific focus to liabilities sort of than assets. Discussion 3 SOX and Accounting Professionals The Sarbanes-Oxley Act (SOX) has been recently introduced in the United States to promote fair reporting of asset valuation. The SOX framework necessitates proper financial accounting disclosure and therefore organizations are required to cook complete information of assets, depreciation, values, and status in any accounting period (Omnix Asset Management,