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Essay / Research Paper Abstract
A 6 page paper defining and providing examples of financial and management. Management accounting also provides decision-making tools, while financial accounting gives investors and regulatory agencies a view of how effective management's decision-making has been during the reporting period. Bibliography lists 6 sources.
Page Count:
6 pages (~225 words per page)
File: CC6_KSacctFinMgmt.rtf
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Unformatted sample text from the term paper:
of accounting is to provide information that enables effective business decision-making. There are two broad divisions in accounting: financial and management (Horngren, Sundem and Stratton 26). Each has
its place in any organization of any size. The purpose here is to explore each. Financial Accounting It is financial accounting that
most people think of upon hearing the word "accounting." This is the business of recording, tracking and planning expenses and income for the purpose of indicating the financial health
of any specific organization. Financial accountings primary purpose is to "prepare financial reports that provide information about a firms performance to external parties" (Financial Accounting). These external parties
can include investors, regulatory agencies and creditors. It is (or is supposed to be) "performed according to the Generally Accepted Accounting Principles (GAAP) guidelines" (Financial Accounting).
The Federal Reserve Bank of New York hosted a conference in December 2000 centered on corporate governance. Then-SEC chairman Arthur Levitt was the conferences keynote
speaker, and his primary topic was that of enhancing the quality of financial reporting. He stated in his conference address, "No market has divine right to investors capital."
Investors can make informed decisions only when the information they have is full and accurate; the implications of sloppy or fraudulent financial accounting can be seen most clearly in the
case of Enron. At the time that Enron began establishing its several special-purpose entities (SPEs), its overt purpose was to build for the
long-term future without adversely affecting the short-term balance sheet. It was undertaking some projects that required intense capital outlay and that it believed would post pleasing returns in the
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