Reference no: EM131389312

Disscusion #1

1. What is the difference between managerial and financial accounting?

Managerial accounting is concerned with providing information to manager to use within the organization. This provides information for managers to plan, control and make decisions. Managerial accounting emphasizes decisions that affect the future. Managers review accounting reports that provide revenue, expenses, labor, space, equipment and RVU's. Managerial accounting does not need to follow GAAP/IFRS and is not mandatory.

Financial accounting is the reporting of financial information to external parties such as stockholders, creditors and regulators. It emphasizes financial consequences of past activities. It is objective and verifiability and precise. Financial accounting must follow GAAP/IFRS and is mandatory for external reports.

1. How is accounting relevant to career?

Both managerial and financial accounting is critical to managers who are in charge of running a healthcare organization. The leadership must know the revenue, minus the expenses, charity/bad debt in order to ensure bills are being paid. Managerial accounting can provide details to the expenses, labor costs and overhead costs. Managers must understand accounting. It would be like a person not reviewing their bank statements. A person wants to make sure their payday money is in the bank, the person monitors the money they are paying out and if any interest is incurred.

1. Why has ethical behavior in the area of accounting and finance so important?

Ethical behavior and integrity is doing the right thing when nobody is looking. Trust is required between consumer and organizations. Consumers don't want to be taken advantage from a financial perspective. It is very important that organizations trust the accountants who are reviewing and collating financial information. The reporting and integrity of the data is used to make company decisions. In addition if a company has dishonest staff who are not following GAAP/IFRS guidelines they could be fined for unethical reporting of financial information.

Discussion #2

The key difference between managerial and financial accounting is that managerial accounting information is aimed at helping managers within an organization make decisions. Financial accounting is aimed at providing information to parties outside of an organization. Managerial accounting is relevant to future business and careers because it applies to any industry. I n my future manager position, I know I will be concern with how to price products or services, or whether to allocate resources to training staff. It is beneficial to also know the most efficient way to raise capital or how to adjust strategic decisions in light of the economic environment. Making capital budgeting and decisions is a vital part of being a manager. Also, strategies decision making is an ongoing process that involves creating strategies to achieve goals.

Ethical behavior in accounting is very important. Financial misconduct can cause a business to lose a lot of money. An example, an accountant or manager embezzling money for their needs. Another reason is that accounts are often privy to sensitive information regarding clients, like bank accounts and social security numbers.

Accountants are faced with many ethical dilemmas and some may be complex and difficult to resolved. A high standard of ethical behavior is expected in a profession. Businesses rely on word of mouth and past conduct to customers and creditors to remain successful. the importance of ethics in managerial accounting boils down to the potential of business success or business failure.

Discussion #3

I find that I would prefer to watch videos for the best help of resource in learning new things. Sometimes I find examples very helpful if there carefully broke down. I struggled with the topic double entry accounting and I came across a very interesting video that careful broke down concept of double entry accounting. I choose YouTube to excess a video on double entry accounting. The name of the video is: the basic principles of double entry bookkeeping. The video contain lots of examples that shows us how relevant double entry is in a business. The video is 3:00 minutes long. Double entry accounting means your business transactions will always have two affects or maybe more. It tells us that double entry accounting depends on the way that each money transaction has equivalent and opposite impacts in two distinct accounts

I work part-time for a local sports bar here where I live in Mound Bayou, MS. The video basically says that everytime someone buys a drink from us they pays cash to me and in return they get there drink. Something as simple as just buying this drink but it has two effects from us both,the buyer and seller. The one who buys the drink cash balance would diminish by the measure of the cost of purchase and then again he will get the drink. Let's just say we're one drink less and our cash balance goes up by the cost of drink. The two effects of accounting entry are said to be Debit and Credit. Basically every debit entry will always have a equal credit entry. The term name for it is called Duality principal.

Accounting equation

+assets=liability+capital

*must always balance*

-dual effect principle
-separate entry principles
-the accounting equation.

So any type of increase in expense will be counter balanced by a decrease in assets or increase in value and or the other way around.

Discussion # 4

The idea I initially struggled with this week was accounting firm Arthur Andersen's guilt in its involvement in the big corporate scandals (particularly that of Enron) of the new millennium that have become a staple of discussions in accounting, finance, and ethics classes. As I went over the ethics & corporate social responsibility sections in the textbook this week, my mind went immediately to what happened at Arthur Andersen, not just because of the big publicity the scandal garnered, but because the accounting representative I work with in our office used to work for Arthur Andersen.

Like many people who were bombarded with news about the scandals, I thought that Andersen was guilty and during my meeting with our accounting representative, I asked her just out of curiosity if the top executives got punished for what the company had done. Her sudden, angry response caught me off-guard: "Contrary to everyone's misconception, Arthur Andersen was NOT guilty of the accusation and the Supreme Court, in a unanimous decision, threw out the case that ruined my life and 28,000 others' lives because the government wanted to portray us as this poster child for accounting fraud during their witch hunt, when they didn't have a valid case against us to begin with, as the Supreme Court duly noted. But yes, WE were all punished for it!" She went on to relay stories of her co-worker friends, many of whom weren't even accountants, losing their homes, filing bankruptcy, committing suicide, or having to suffer all other horrific things because of the wrong verdict in 2002 that got overturned three years later, but with barely the publicity that the scandal and the "witch hunt" itself garnered.

As someone who enjoys going online for my research, I thought that I should perhaps check YouTube first to watch any TV news clips that were uploaded about Arthur Andersen's "acquittal," but what I discovered was that if one were to simply type "Arthur Andersen," videos of the scandal and the company's "rise and fall" and "guilt" would come up but there would be nothing at all about the fact that the company had been cleared of wrongdoing (anyone who simply wants to learn about the company or doesn't have a clue about the Supreme Court's decision would therefore be misled by the clips available). A search stating "Arthur Andersen scandal" would also yield the same results.

Even a quick Google search yielded similar results. The top entry that came up was "Arthur Andersen's fall from grace is a sad tale of greed and miscues" (Brown & Dugan, 2002). A narrower search specifying Andersen getting cleared yielded two, among a few useful articles: "Supreme Court overturns Arthur Andersen conviction" (Mears, et al., 2005) and "Enron auditor's verdict reversed" (Associated Press, 2005). The articles explain, per Chief Justice Rehnquist's account, how vague and too broad the instructions for the jury were, and how erroneous it was that the jury was given contradicting instructions to convict: to convict based on "improper intent" and to convict just as well even if there was no malicious intent. In other words, Arthur Andersen was going to get convicted, regardless. (Arthur Andersen's position was that the destruction of Enron documents -- this was what the obstruction of justice accusation was all about) was part of the routine purging process that all accounting firms undertake and that the Enron documents they had gotten rid of were not pertinent to the case). The Chief Justice also said that prosecutors could not come up with convincing responses that would persuade the Supreme Court to convict.

Given the lack of publicity about Arthur Andersen getting cleared and the fact that its name is already ruined (the company still exists but with only a skeleton crew who are handling its legal cases) along with the employment records of its former 28,000 employees, I won't be surprised to learn if more people out there will also get so "unceremoniously"corrected by an angry former employee for the "misconception." Regardless, I was glad to learn more about the case in connection with the ethics discussion in our course.