Purpose of Accounting

Purpose of Accounting

ACC310-1201A-02

Colorado Technical University

Kristen Jacobson

January 16, 2012

There are many different reasons that organizations, corporations and individuals utilize accounting. Society finds accounting to be extremely useful and important, in order to find specific information. There are many purposes to corporate governance, in which many corporations and organizations use. Over the years, technology has changed the way that individuals are able to utilize accounting.

The purpose and objective to accounting is communicating via financial statements. Accounting is extremely important for businesses and organizations because accounting works as a system that relays financial information about a certain company (Edmonds, 2010). Accounting provides the financial information to users, in order for them to make a better decision about the corporation or organization. Using measurement, classification and summarization, accounting analyzes financial data and decreases the data into reports.

The objective of accounting is to provide financial information to parties, who have interest in the corporation or organization, in order to make a financial decision about them (Edmonds, 2010). This is usually provided as a profit and loss statement and a balance sheet. The main objectives of accounting can be summarized as the maintenance of financial business records and transactions, calculating profits and losses, depicting of financial positions, and offering these statements to the general public.

Corporate governance is extremely important to a company and has a meaningful purpose. The purpose of corporate governance is to reduce the corporate deviance in an organization or corporation (Edmonds, 2010). Other purposes are to motivate corporate management to keep promises to investors. This means that they must be honest with the investors and any promises that they make, must be followed through. Corporate governance is...