Modern accounting systems have become the foundation from which the modern organization can rely and depend upon to maintain a strong efficient strategy that will help the organization grow. The modern accounting systems embraces the old accounting practices that have been used for hundreds of years and builds upon that platform to give modern organizations control over the finances. There must be set in place internal controls to keep the company assets from being stolen and that is why modern accounting systems utilizes many internal controls with the organization. The modern accounting system is one of the most valuable assets that a modern organization has in its possession because modern accounting systems make better use of the organizations resources.
The modern accounting systems have made a difference in modern day organizations by finding ways to manage the financial records and revolutionize the way accounting helps improve businesses. Modern accounting systems have evolved over the years and are vital for current and future operations of an organization by implementing a strategy to follow starting with accounting in the business environment. The business environment plays a strong role in accounting because there certain individuals that rely on the information to make sound decisions which will affect the organization as well as outside organizations. “Business owners use accounting information to set goals, to measure progress toward those goals, and to make adjustments when needed” (Horngren, 2012).
The financial statements give owners the information they need to help make those decisions. The investors, creditors and even taxing authorities rely on modern accounting systems to ensure they are not being lied to and the financial records are completely sound. There are also certain organizations that govern the accounting procedures in an organization as well as the ethics along with standards of professional conduct because accountants should always be ethical and maintain standards. The organizations accountants use the accounting equation to examine the organizations transactions to determine what assets a company holds, the expenses that they have incurred and the organizations overall net worth. The accounting equation keeps the accounting process running smoothly to strengthen the business atmosphere by maintaining the business affairs through extensive record keeping of all transactions. With the ending result of preparing the financial statements for the organization to understand what assets, expenses, liabilities and what the company is actually worth at the end of a period. The financial statements are essential for every organization to know if they are doing well or if they are in trouble and need to drastically make changes to accommodate the losses incurred.
[Accounting] information helps people inside and outside businesses make decisions. It supports management activities by providing managers with quantitative information about their business to aid them in planning, operating and evaluating the business’ activities. Accounting information supports external decision making by providing people outside of the business like investors, creditors and stockholders, financial analysts, bankers, suppliers, labor unions, customers and governments with financial statements containing economic information about the performance of the [business] (Billie Cunningham, 2012).
The second way that modern accounting systems made a difference in modern organizations would be by showing how the accounting system was able to show how the debits and credits had an effect on the assets, liabilities and the equity of the organization. Even though debits and credits have been used for hundreds of years they still play a monumental role in the accounting process and that is why they are used by accountants today. No matter how many debits are added to the ledger there must be...
Please join StudyMode to read the full document