The Importance of Accounting to the Stakeholders of an Organisation

Topics: Investment, Asset, Economics Pages: 4 (998 words) Published: September 17, 2012
The importance of accounting to the stakeholders of an organisation

Accounting must be understood as a complete, consistent, logical system for collecting and processing data on the assets of the company and its activities, as well as the presentation of economic and financial information.

The primary objective of accounting is the development and provision of information about assets components and conducted by the company business. This information is used primarily by:
* Board business to know the financial position, resource efficiency and equity, financial performance, tax burden, an individual's position in the market, as well as for decision-making both operational and strategic, * Business environment, which is linked with the economic and capital transactions. Accounting allows for clear and reliable picture of the economic reality of the company, its profitability, liquidity and the economy. The records kept by the accounting are also important information for owners of business entities in the maintenance of the property. In addition, financial statements and reports prepared on the basis of the accounts are the basis for periodic settlements with fiscal authorities, owners, etc., and are also a source of information for potential investors. As we have said in our introductory definition, accounting is essentially an "information process" that serves several purposes: * Helps management actually manage the organisation,

* Providing a record of assets owned, amounts owed to others and monies invested, * Providing reports showing the financial position of an organisation and the profitability of its operations, * Providing a way of measuring an organisation's effectiveness (and that of its separate parts and management), * Helps stakeholders monitor an organisations activities and performance, * Enables potential investors or funders to evaluate an organisation and make decisions.

There are many potential users of...
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