Business Finance and Accounting

Business Finance and Accounting

Introduction

In order to make the owners understand about the financial management and the accounting principles a memo is being developed. The memo will provide in detail the several key concepts and principles that are a part of the financial management, accounting, internal control, management of cash and the Sarbanes-Oxley regulations. In order to perform the functions of the Vice President the person will need to be fully aware about the reporting principles of the financial statements because it is the responsibility of the management to make sure that all the financial statements are reported and made accounting to the accounting principle so that it can be concluded that the financial statements are accurate and transparent.

Discussion

Memo

To: Vice President

From: Finance Manager XY

Date: 1st December, 2012

Subject: Providing Financial and Accounting Guidance

The world has changed the roles of managers and upper hierarchy who are doing business from several years. Nowadays it has been included in the role of a President or a Vice President to also have the knowledge of every aspect of the business either finance, accounts, marketing or production. Accounting is the language of the business through which decision makers can have a knowledge about the processes of the business, reports of the activities conducted in the business and these report generation help in making the decisions regarding the firm. Accounting is an information generating tool which is used by individuals, investors, creditors and other people associated with the organization. There are two kinds of accounting: financial accounting and management accounting. Financial accounting is related to the economic activities of the organization whereas management accounting include budgets, forecast reports and projection reports of the projects these help the decision makers in making the decision of either to carry on a project or shut down a project. Accounting is used different on different scales in all types of organizations like sole proprietorship, partnership, public and private limited company. The accountants need to follow the guidelines of disclosing the accounting information in the books of accounts these are: Generally Accepted Accounting Principles (GAAP). As an operational Vice President one should also know about the rules and regulations followed in the other countries as in America Financial Accounting Standards Board (FASB) and the International Accounting Standards Board sets the guidelines for the organization to do financial reporting in an organization. There are two basic accounting methods that have an impact on the revenue of the firm. These are: cash basis accounting and accrual basis accounting. The cash basis accounting keep a track of the cash that is available in order to pay the daily expenses of the firm and how much the cash is available to provide security to the organization in case of financial crisis in the future. The accrual accounting of an organization provides an analysis of the debt management of the firm and how much the firm is earning revenues in order to pay the debt of the firm. There are three factors that affect the business ...