accounting essay introduction examples

Accounting Essays

Variable costing: a comprehensive analysis, the importance of cash flow statements in organizations, extended definition of accounting and finance, establishing the conceptual framework gap between ifrs and gaap, the impact of ai on accountants annotated bibliography, alternative costing methods, financial reporting strategies and decision making at catholic charities archdiocese houston-galveston, luckin coffee accounting fraud, evolution of differences between gaap and ifrs in financial accounting, payroll audit and risk assessment, oklahoma natural solution, a critical evaluation of traditional absorption costing and activity-based costing in business management, cybersecurity in accounting, evaluating and assigning to appropriate funds, understanding general long-term liabilities in government finance, essays on accounting.

You may look at this topic and start rolling your eyes or fighting back a yawn. The last thing people want to think about or even write about is accounting. It can be a bit of a dry topic for many but it can actually be an intriguing subject to cover.

Accounting is such a critical piece of how the business world works and sometimes we overlook it due to its complexity. Yet, even a basic and core understanding of this area can show you the most realistic insights into a company’s financial health. It will highlight growth opportunities and where there may be challenges ahead.

Accounting doesn’t just keep the books in order for small businesses and companies. It can also be used for family offices, which are high-net-worth investment offices that can help with wealth management. Yet accounting isn’t just for the rich. Having proper financial accounting of your finances and any side hustles or business will help keep you compliant and avoid any type of unnecessary fraud.

How to write essays on accounting

You can go into the history of accounting or take a specific subset of accounting and write about it. Those subsets can include writing about accounting for individuals or accounting for businesses. You can also choose topics on how accounting looks on an international scale. What are the universal rules in accounting and are they similar across various jurisdictions?

You may not yet be an expert in accounting but there is plenty of research and content out there. This is because it needs to be exact and it seems the data on it is also just as precise. Make sure to cite and reference where required.

You can even take an approach to see how accounting has been modernized, and if it’s just a system of organization of financial data, can it not be fully automated?

What do accounting topics look like?

• The importance of accounting in business • The different types of accounting • The accounting cycle • Accounting ethics • Accounting fraud • Accounting for small businesses • Accounting for international businesses • Emerging Trends in Accounting

Use essay examples on this page for inspiration, and start creating your own piece!

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Essay on Accounting

1. introduction.

Accounting, as an art and a science, and in the common sense, is the art of recording, classifying, and summarizing transactions and events in a significant manner and in terms of money. These transactions and events are, at least in part, of a financial nature, and interpreting the results thereof. It is a science as much as it is an art because this concept not only encompasses the principles and theories of methods but also includes the application of these principles, theories, and methods in interpreting results. In the real world, accounting means disclosing authentic information about transactions to the stakeholders of the business, which can be verified through auditing. The importance of accounting in modern business has been one of the principal changes in the effectiveness of the credit background and the general expansion of prosperity. The accounting profession has created a service that is no longer merely an augmentation or of value where there is some sort of special need. The revolutions in economic and social attitudes have not only changed the world's life but also its goals. The view of the modern world is that of an experienced company seeking prosperity based on economic objectives, which include growth, stability, profitability, and development reflecting social, political, and ecological situations. Within the tapestry of economic life, business comprises a mosaic. The significance of business is apparent from the fundamental fact that a modern business society will not survive without active business enterprises. One of the most important aspects of accountability towards society is the requirement for companies to present a set of financial statements. The financial statements have the purpose of offering information about the amounts and types of assets, cash flows, and changes in stockholder equity. Companies are the most significant means to achieve economic growth, and they need to account for their obligations towards society. They need to extend accounting to account for three obligations: economic, social, and environmental. In accepting social responsibilities, companies should contribute to the government's efforts to promote socially desirable practices. Since business is part of society, it is expected to make a contribution to development while also achieving the objective of profit maximization.

1.1. Definition and Scope of Accounting

Accounting is an essential information management system, which helps in the area of economic activities within the premises of an organization. Any organization, without an accounting system, is thrown into complete darkness as to the outcome of his policy and the chances of survival. The process that generates accounting information is called the accounting system. This system utilizes the ability of production by product costing, planning, fraud control, budgeting, forecasting, and taxation possibilities. Therefore, the accounting system is focused on attaining the goals of an organization. Accounting is used as an information system for reasons that are both complex and varied. Despite the fact that computer technology and economic theory are producing more sophisticated management information every day, the basic objectives of accounting are little, if any, changed from eighty years ago when such technology did not exist. Accounting's central role in economic life demands that standard setting be conducted through a political process where the quality of information, decision utility considerations, and resource realities must invariably play a major role - a political process where administrative feasibility considerations are strictly peripheral. These conditions indicate that the ultimate responsibility for the definition of accounting must rest in a more general public agency. Only then can accounting serve the real needs of individual enterprise and economy as a whole.

2. The Evolution of Accounting

In contemporary free-market economies, the classification and recording of financial transactions is of such a universal concern that a separate field of study of human knowledge has arisen to service this need. The subject has its own specialized area both in higher education and in vocational training as well as being served by a supporting specialized literature. Moreover, apart from the practical business need for a profession of accountants to advise on and implement procedures for financial classification and recording, the subject is worthy of detailed study because it is a vital instrument of both economic and social policy. The accounting framework provides a structure through which individuals, businesses, and governmental entities may communicate a concise and consistent picture of their true economic substance as well as the profitability of their operations. The pre-industrial revolution scenario was certainly not one of an economy awash with accounting information. The modern standard-setting process suggests that investors are provided with financial statements that contain what is presumed to be useful and relevant information about the conditions of the business enterprise and about the impacts of the firm's operating decisions on the economic welfare of the decision makers.

2.1. Historical Development

The accounting function and its related processes have shown an ability to adapt over time to the changing needs of society and its economic and business systems. In addition to advances in technology, the discipline has been influenced by the broader sphere of economic teaching, legislative demands, increased research activities, and more sophisticated business practices. The historical dimension of the accounting discipline and its reputation for conservative evolution, as opposed to radical change, are well documented. However, it was written during a period when the profession had serious concerns about skills gaps in its traditional discipline, and in so doing may have underplayed the extent to which modern business and accounting had in fact been undergoing a period of 'revolution rather than evolution'. A discussion of the historical dimension of the accounting discipline is instructive to a consideration of the role and importance of accounting today. Accounting practice has evolved from a manual to a computerized process but has seen no radical changes in the role that it is expected to play in society. The usual viewpoint is that change, whenever it may occur, is a very slow process. This paper addresses the implications for accounting skills that might arise from contemporary business changes.

3. Key Principles and Concepts in Accounting

Accounting principles are the rules that must be followed when accounting for business transactions and recording accounts. The need for rules is to ensure fairness, consistency, and comparability in the financial statements so that financial statements of various companies and for various periods can be compared and users can interpret them properly. Accounting concepts are the assumptions or conditions without which financial statements would not be accurate. They are basic concepts on which financial statements are prepared. Commonly applicable accounting concepts include the entity concept, the going concern concept, the cost concept, the time period concept, the realization concept, and the matching concept. Item 4 discusses each of these concepts in detail, giving reasons why financial statements should be prepared according to them. Since the going concern concept assumes continuity in business, it provides the basis for asset valuations. The concept on the whole influences accountants to record assets at their historical costs to the business. The entity concept assumes that the business has a separate existence, separate from its owners, based on valuation. This concept helps to establish ownership of company assets, manage company transactions, and produce an accurate set of accounting statements. In short, accounting concepts translate a few conceptual ideas (like separate business entity) into working practical formats. All rules of accounting are derived from these concepts. The importance of concepts, however, is higher than that of principles. Although basic as well as complex principles are created to measure accounting phenomena as accurately as possible, they are created on concepts. The point to note here is that principles cannot override concepts and that companies have to violate concepts. On the other hand, there are instances when companies can violate principles and obey concepts.

3.1. Accrual Basis vs. Cash Basis Accounting

A business entity can prepare financial reports either on the accrual basis or the cash basis of accounting. Cash basis accounting is similar to a checkbook in which only cash receipts are recorded and only cash disbursements are recorded. When the business pays for an expense such as rent, utilities or salaries, the business records cash decreased for the payment of the expense. The business will also record the expense increased for the amount of the expense. Cash basis accounting only requires the recording of an expense if the payment is also paid in cash. A firm which uses the cash basis of accounting performs many complex transactions involving credit purchases and credit sales, yet record only exchange of cash in and out of the entity for external exchanges. Expensing costs only when cash is paid for each expense is based on the premise that as cash is spent on various activities, the entity incurs costs and uses resources in order to earn that cash. Generally accepted accounting principles (GAAP) require businesses to use the accrual basis of accounting and prepare financial reports. One of the advantages of accrual basis accounting is that the matching principle can be used. Accrual basis accounting records the events that cause the changes in financial position of a business. A basic concept underlying accrual basis accounting is to match costs with revenues, or expenses with the related revenues. When an expense is incurred in order to produce revenues in the future, the expense is recorded in the current period. If, in a given period a business entity only received cash, what would the ongoing concern concept look like in practice? It means the preparation of two-basis financial statements. This does not insinuate that the business is able to prepare a statement of financial performance because the revenues and expenses are recognized by means of accrual basis accounting. This presupposes that transaction officers can distinguish between cash transactions and non-cash transactions. In practice, this is a challenging task. However, the entire transaction, both cash and non-cash transactions, are recorded in a transacting accounting model. An entity must first decide whether preparing cash flow statements is a duplication of financial reporting or if it produces additional financial information. Selected cash flow statement indicators have been developed in this study with a view to help decision-makers to evaluate potential future cash flows from operating activities and whether the entity’s cash flows generate sufficient cash resources to meet its financial obligations.

4. Types of Accounting

The types of accounting are very broad. There are a number of ways in which accounting can be categorized; some of these categories are broader than others. Here are the most important accounting types, namely: financial accounting, management accounting, government accounting, auditing, tax accounting, fund accounting, forensic accounting, and social accounting. Their classification is based on the type of entity being reported on and the target audience. Financial accounting is the company's accounting itself, based on standardized methods and principles. The information is designed primarily for external users, including creditors, investors, and regulators. Management accounting is directed primarily toward providing information for internal management use. The other types of accounting are designed for special situations or particular expectations. These are government accounting, chiefly in the form of financial statements of government activities, auditing, a function of professionals to express reasonable assurance that information is presented fairly, tax accounting, fund accounting, with compliance emerging as the most important focus.

4.1. Financial Accounting

Financial accounting is concerned with the preparation and presentation of financial statements, such as the income statement, balance sheet, and cash flow statement. The main objective of financial accounting is to generate information about the financial performance and position of the firm for use by various stakeholders. The income statement provides performance information over a period of time, such as a financial year or quarterly period. The balance sheet and cash flow statement are used to position the enterprise at a point in time. The balance sheet shows the type of assets owned and the mix of financing, such as debt and equity. The cash flow statement provides information about the firm's activities related to generating and consuming cash. The success of our market economy is based on the willingness of individuals and organizations to invest in businesses by acquiring the shares and debts of those businesses. It is not feasible for investors to run the businesses in which they have invested, so they provide funds to persons who are willing and able to manage these investments. The management of businesses involves taking a set of complex decisions, such as setting product lines, marketing products, choosing production methods, investing funds, and recruiting an effective labor force. From the perspective of stakeholders, the accounts are a report card on the board of directors and their appointees who are managing the companies. If a company does not prepare meaningful financial reports, then the cost of its borrowing from the capital market will increase and its stock price will be lower. For this reason, the various regulatory agencies require that companies issue financial statements with the following characteristics. First, financial accounting principles are specific and produce standardized financial statements that can be easily analyzed by security market participants. Second, these principles require firms to produce more than one type of financial statement: an income statement, balance sheet, and cash flow statements. These financial statements are not stand-alone items; they must be prepared according to specific accounting principles to be useful. Third, these financial statements must be available to the user on a timely basis; generally, companies issue these statements every quarter and annually.

5. The Role of Technology in Accounting

Technology is increasing, with AI and robotics taking the place of accountants, which is giving a tough time to the accountants. All the tasks that were traditionally done by accountants, such as maintaining the general ledger, preparing financial statements, and preparing tax returns, have now become possible with the help of software such as Tally, QWC, Waves accounting, QuickBooks, Xero, etc. Accounting is now closely linked with computer technology, rather than its traditional accountancy and bookkeeping procedures, which involved manipulating record books and files. This shift has helped prevent humans from getting paper cuts, grey hair, and wrinkly appearances. Verbal or written instructions can now be inputted into the computer by the user. Data source documents and the software develop constant information that is reflected through the computer monitor and can be presented in hard copy. Computers sort, calculate, and summarize the data in order to produce financial information. Accounting software is a class of computer programs that perform accounting operations. It provides functionality for accounting, including accounts payable, accounts receivable, payroll, and trial balance. It functions as an accounting information system. Some software programs can be customized to meet the specific needs of a business. The advantages of using accounting software include increased speed and accuracy in financial information. Data can be easily formalized by non-accounting personnel without substantial training, while the formalization can help the accountant prepare more accurate financial data.

5.1. Automation and Artificial Intelligence

One key reason why firms are increasing their investment in accounting is to increase efficiency and free up accountants to focus on those tasks in which the technology cannot yet replace human expert judgment. There seem to be three specific phases in the development of accounting practices over time: a) manual accounting in the traditional business model; b) automated accounting in the current business model, in which efficient and simple but narrow managerial operations are supported; and c) artificial intelligence-led, intelligent accounting in the next-generation business model, in which broad, complex but labor-intensive managerial operations are supported. At the early stages of their lifecycles, the IT-based systems suffered from a number of teething troubles mostly related to integration issues both within and between organizations and inefficient process redesign of the accounting activities. A main driver for the future demand for accountants then appears to be the degree to which artificial intelligence (including machine learning) can replace the functions of accountants and the extent to which the use of that technology is ethically and legally permissible. It is already possible to automate the simpler, procedural tasks that are typically associated with the firm's accounting functions. However, accounting scholars agree that, as a practical matter, general use of automation has not affected accountants' consumption of statistical reporting. Management accounting researchers have postulated that finite limits exist regarding the automation of exposure draft eight that would repost from leveraging qualitative interplays with clients. These finite limits are, to some extent, based on societal norms; people may resist machine advice because they see value in the intermediary (i.e., human accountant).

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Essays on Accounting

Accounting essay topics and outline examples, essay title 1: the evolution of accounting: from ancient methods to modern financial reporting.

Thesis Statement: This research essay traces the historical development of accounting practices, explores the transition from traditional methods to modern financial reporting, and highlights the role of accounting in today's business landscape.

• Introduction
• Early Accounting Methods: Ancient Civilizations and the Birth of Bookkeeping
• The Double-Entry System: Luca Pacioli's Contribution to Modern Accounting
• The Industrial Revolution and the Expansion of Accounting Practices
• Accounting Standards and Regulations: FASB, IFRS, and GAAP
• Modern Financial Reporting: Balance Sheets, Income Statements, and Cash Flow Statements
• Accounting in the Digital Age: Technology and Automation
• Conclusion: The Enduring Significance of Accounting in Business

Essay Title 2: Ethical Dilemmas in Accounting: Cases, Codes of Conduct, and Professional Integrity

Thesis Statement: This research essay explores ethical challenges and dilemmas encountered in the field of accounting, examines industry codes of conduct, and emphasizes the importance of maintaining professional integrity.

• Ethical Issues in Accounting: Fraud, Misreporting, and Conflicts of Interest
• The Role of Professional Organizations: AICPA and IMA Codes of Ethics
• Case Studies: Enron, WorldCom, and Other Notable Accounting Scandals
• Whistleblowing and Ethics Reporting: Legal Protections and Ethical Considerations
• Education and Training: Fostering Ethical Decision-Making Among Accountants
• Conclusion: Upholding Ethical Standards in the Accounting Profession

Essay Title 3: Financial Accounting vs. Managerial Accounting: Methods, Objectives, and Their Role in Business Management

Thesis Statement: This research essay examines the distinctions between financial accounting and managerial accounting, their respective methods, objectives, and how they contribute to effective business management.

• Financial Accounting: Recording, Reporting, and External Stakeholders
• Managerial Accounting: Decision Support, Budgeting, and Internal Management
• Comparing Financial Statements and Managerial Reports
• Objectives of Financial and Managerial Accounting: Compliance vs. Decision-Making
• Interactions Between Financial and Managerial Accounting in Corporate Governance
• Case Studies: Real-World Applications of Financial and Managerial Accounting
• Conclusion: Leveraging Accounting Practices for Effective Business Management

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