BSB110 Lecture Notes - Lecture 1: Industrial Revolution, International Financial Reporting Standards, Stakeholder Management
Accounting – What is it, brief history, context – corporate social responsibility
Accounting
- Involves the information system that measures business activity, processes the data into
reports, and communicates the results to decision makers
- Key to communicating
Financial Accounting
- Provides information to external sources e.g. investors, lenders
- Helps other businesses decide whether or not to get involved with your business
Management of Accounting
- Provides information internally e.g. managers
- Helps people inside the business make decisions
Relevance
- Financing decisions
oHow much money to borrow
oWhat assets the business should invest in
- Management/HR decisions
oWhat division has the best performance?
oWho gets a bonus this year and how much?
- Marketing decisions
oWhat price should we charge for our products?
oHow much money can we spend on advertising?
- Investing decisions
oShould we buy/sell shares?
History of Accounting
- Highlights
oOrigins attributed to 1494 work of Luca Pacioli
oIndustrial revolution of 19th century
oEmergence of large entities
oSeparation of owners and managers
oOwners of the business no longer involved in the day to day running of the business
- Accountability and accounting
oAgency relationship whereby managers were acting on behalf of the owners
oOwners could not directly observe managers actions
oLed to the need to report on financial status
oManagers accountable for the methods they use to run a business
oOwners need information for decision making
oWith more complex transactions came need to use computerised systems
oMYOB, Reckon, SAP
- Increased internalisation of business
- Development of International Accounting Standards
- International Financial Reporting Standards – consistency in accounting globally
Accounting in context – Corporate Social Responsibility (CSR)
- The way a business operates can impact on the environment and society
- CSR – the impact of a company’s activities on the welfare of society
- Socially responsible activities
oResult from policies and procedures that have been put in place by an entity to
ensure that it is an acceptable, ethical citizen
oInclude attitudes towards, and practices associated with, customers, employees, the
environment and the community
- Businesses need to act in an ethical manner
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Accounting what is it, brief history, context corporate social responsibility. Involves the information system that measures business activity, processes the data into reports, and communicates the results to decision makers. Provides information to external sources e. g. investors, lenders. Helps other businesses decide whether or not to get involved with your business. Financing decisions: how much money to borrow, what assets the business should invest in. International financial reporting standards consistency in accounting globally. Accounting in context corporate social responsibility (csr) The way a business operates can impact on the environment and society. Csr the impact of a company"s activities on the welfare of society. Businesses need to act in an ethical manner: corporate citizens". Reports made so customers don"t unwittingly buy products from unethical" companies. Maximising profit leads to socially irresponsible activities. Justification for companies voluntarily undertaking socially responsible activities: enlightened self-interest". Costs motivated by desire to promote society"s best interest (hope that it generates benefits for company)
