2013년 11월 26일 화요일

About 'financial accounting information system'|What is the Role of Management Information Systems in the Reporting Process in a Multinational Enterprise







About 'financial accounting information system'|What is the Role of Management Information Systems in the Reporting Process in a Multinational Enterprise








The               role               of               the               financial               manager               is               central               in               the               flow               of               money               from               investors               into               the               firm               and               then               back               to               those               same               investors.

There               are               two               major               decisions               for               the               financial               manager               to               make               that               greatly               affect               this               process.

In               fact,               they               are               central               to               the               success               or               failure               of               the               company               as               a               whole.

The               capital               budgeting               decision               asks               how               much               money               the               company               should               invest               and               into               what               assets               should               this               investment               be               made.

The               financing               decision               determines               how               the               cash               for               the               investment               will               be               raised.

The               company               raises               money               by               selling               securities.

Brealey,               Myers               and               Marcus               explain               that               "these               pieces               of               paper               have               value               because               they               are               claims               on               the               firm's               real               assets               and               the               cash               that               those               assets               will               produce.

For               example,               if               the               company               borrows               money               from               the               bank,               the               bank               has               a               financial               asset.

That               financial               asset               gives               it               a               claim               to               a               stream               of               interest               payments               and               to               repayment               of               the               loan.

The               company's               real               assets               need               to               produce               enough               cash               to               satisfy               these               claims."               (Fundamentals               of               Corporate               Finance,               p.18)
               The               flow               of               money               through               the               financial               manager               is               also               set               up               by               Brealey,               Myers               and               Marcus.

"The               flow               starts               when               financial               assets               are               sold               to               raise               cash.

The               cash               is               employed               to               purchase               the               real               assets               used               in               the               firm's               operations.

Later,               if               the               firm               does               well,               the               real               assets               generate               enough               cash               inflow               to               more               than               repay               the               initial               investment.

Finally,               the               cash               is               either               reinvested               or               returned               to               the               investors               who               contributed               the               money               in               the               first               place."               (Fundamentals,               p.

19)               If               the               bank               lends               money               to               the               firm,               the               firm               must               of               course               then               repay               the               money               plus               any               interest               accrued.
               Investments               can               be               made               into               anything               from               physical               goods,               like               equipment               or               new               products,               or               it               can               be               invested               into               ideas               like               a               marketing               plan.

An               investment               is               made               with               the               hope               that               it               will               provide               results               in               the               future,               the               financial               manager               must               be               aware               of               what               kind,               how               many               and               how               soon               the               benefits               will               start               to               come               in               from               the               investment.
               One               of               the               most               common               methods               of               raising               money               is               to               invite               investors               to               put               up               the               cash               and               offer               them               a               share               of               the               future               benefits.

The               repayment               can               be               done               with               stock               shareholding               or               simple               cash,               maybe               even               a               combination               of               the               two.


               The               big               ideas               are               a               part               of               the               financial               manager's               role,               but               they               are               also               in               charge               of               providing               the               cash               for               the               week               to               week               operations.

The               manager               also               needs               to               assess               and               diffuse               all               risks               that               may               hurt               the               company.
               Encyclopedia.com               explains               the               role               of               an               accountant               as               "The               accountant               evaluates               records               drawn               up               by               the               bookkeeper               and               shows               the               results               of               this               investigation               as               losses               and               gains,               leakages,               economies,               or               changes               in               value,               so               as               to               reveal               the               progress               or               failures               of               the               business               and               also               its               future               limitations               and               possibilities.

Accountants               must               also               be               able               to               draw               up               a               set               of               financial               records               and               prescribe               the               system               of               accounts               that               will               most               easily               give               the               desired               information;               they               must               be               capable               of               arriving               at               a               comprehensive               view               of               the               economic               and               the               legal               aspects               of               a               business,               envisaging               the               effect               of               every               sort               of               transaction               on               the               profit-and-loss               statement;               and               they               must               recognize               and               classify               all               other               factors               that               enter               into               the               determination               of               the               true               condition               of               the               business               (e.g.,               statistics               or               memoranda               relating               to               production;               properties               and               financial               records               representing               investments,               expenditures,               receipts,               fiscal               changes,               and               present               standing).

Cost               accounting               shows               the               actual               cost,               over               a               certain               period               of               time,               of               particular               services               rendered               or               of               articles               produced;               by               this               system               unprofitable               ventures,               services,               departments,               and               methods               may               be               discovered."               (encyclopedia.com)
               The               financial               manager               and               the               accountant               are               very               important               resources               for               each               other,               providing               information               that               the               other               needs               and               also               being               able               to               work               together               to               make               informed               decisions,               particularly               about               investment               opportunities               and               the               day-to-day               operations               of               the               organization.

The               main               difference               between               the               financial               manager               and               the               accountant               lies               in               the               word               "comprehensive".

The               accountant               is               required               to               follow               the               rule               book               to               an               absolute               and               provide               the               most               honest               and               reliable               financial               information               as               possible.

The               financial               manager               is               afforded               the               opportunity               to               take               risks,               even               making               decisions               based               on               a               "gut               feeling".

That               may               be               a               bit               extreme,               as               any               smart               financial               manager               would               consult               all               sources,               particularly               the               accountant,               to               decide               on               a               feasible               and               strong               investment               opportunity.

But               they               are               allowed               to               take               a               chance.


               The               role               of               maximizing               shareholder               value               is               one               that               can               be               shared               by               the               financial               manager               and               accountant.

Both               positions               should               be,               if               not               focused               on,               at               least               concerned               with               maximizing               the               shareholder's               value               and               ultimately               maximizing               the               value               of               the               company.
               The               accounting               procedures               and               statements               are               generally               followed               in               the               methodology               that               would               best               benefit               the               company.

The               account               information               will               also               need               to               provide               the               most               accurate               and               helpful               information               to               assist               the               finance               manager               in               any               decisions.

As               with               any               other               department               in               the               company,               the               accounting               department               plays               an               important               part               in               the               decision               making               and               investment               making               process.









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