Faith Integration and Cost Accounting

Faith Integration – Group 5

Liberty University

The field of cost accounting may not immediately bring the Bible to mind. However as will be discussed, cost accounting is not just a platform in which Biblical values can be practiced, since Biblical values are meant to be practiced in any field. Cost accounting is unique in that it is a discipline that exists to satisfy the demand for values such as truth and honesty, stewardship, diligence, and wisdom in the business arena. These values are inherent in the goal of cost accounting which is to provide specific, useful information that will form the basis for important business decisions. This discussion will highlight how truth and honesty, stewardship, diligence, and wisdom are the driving motivation behind the activities performed by those engaged in cost accounting toward achieving this goal.

Truth and Honesty

Truth and honesty are both important values that must be practiced every day as we make personal and professional decisions. The leaders of a company must always be honest and truthful when conducting business and making decisions that will have an impact on themselves and others. Employees, shareholders, suppliers, and customers all rely on receiving truthful and reliable information when making decisions to conduct business or invest money with a company.

Management could be tempted to manipulate financial statements in order to receive bonuses, promotions, attract additional business, or to please shareholders. A form of fraud that could occur in cost accounting is the overstatement of the stage of completion of ending inventory. The fraud would occur when equivalent units are overstated, which then could lead to an overstatement of ending inventory and understatement of losses (Weil & Maher, 2005). If financial statements or other information provided to the public is fraudulent or deceitful, these actions are considered...