A Career As An Accountant Accounting Essay

Category: Accounting

Accounting is the hardest major in the School of Business at the Great Bethune Cookman University. Many students feel that they are not good in math and that they can't be an Accounting major. I have learned through my years in college that Accounting is not all about math. You have to think critical and use your analytical skills to complete assignments. Back in my freshmen year I wasn't the best critical thinker and had the best analytical skills. Over the years in college I have advanced in those areas of Accounting.

After graduating I plan on studying for the CPA exam. The Certified Public Accountant is regulated by the state law through the regulations and license department of each state. The regulations are different for every state. To become a CPA there are three regulations that each person should meet. The regulation is educational requirements, uniform CPA examination requirements, and experience requirement. The requirements under the educational requirements are you must have an undergraduate or graduate degree with a major in accounting and a certain amount of credits. Most of the states in the United States require one hundred and fifty semester credit hours to take the exam. There are four parts Auditing and Attestation, Financial Accounting and Reporting, Regulation, and Business Environment and Concepts. Under the experience requirements you must have no experience to two years of experience. Some states do require working experience for usually governmental units and as well as internal auditing.

Accounting is information system that provides reports to stakeholders about the economic activities and condition of a business. All accountants use something known as GAAP. GAAP stands for Generally Accepted Accounting Principles. By following GAAP in preparing reports it allows investors and other stakeholders to compare one company to another. Accounting principles and concepts develop from varies research, accepted accounting practices, and as well as authoritative bodies. Financial Accounting Standards Board better known as FASB is also important to the Accounting field. FASB has a primary responsibility for developing accounting principles. FASB publishes statements of financial accounting standards as well as interpretations of these standards.

Accountants uses a concept called GAAP. GAAP stands for Generally Accepted Accounting Principles. These are not a set of circumscribed standards. They also can't be found in a set of rules in a regular book. They have came varies sources. It also has an established hierarchy. Generally Accepted Accounting Principles have standards that are founded by FASB. FASB is the Financial Accounting Standards Board. And it also has literature that can be found by AICPA. AICPA is American Institute Certified Public Accountants. It has said by accountants that the system is working really well. By me being an accounting major I have study GAAP and how it is used for the accounting field. All investors have been in good hands considering that GAAP has been used to offer them varies statements. The statements might include a balance sheet, income statement, and cash flow statements. All these forms are important to the accountant and the investors, it is extremely important to the investors because they would like to see where there money is being handled and where it's going. In 2011 there will be a lot of changes in the accounting field. Many companies will change from GAAP to IFRS.

IFRS stands for International Financial Reporting Standards. It is the newest set of accounting standards. This new standard is said to bring peace in the accounting profession throughout the world. The new standards have been developed by IASB. IASB stands for International Accounting Board. It is a standard for public company financial statements. There are a total of one hundred and seventeen nations that are require for the use of IFRS. Some nations are Canada, European Union, India, and United State of America. These nations arr granted to make the change from GAAP to IFRS in the year 2011. Estimates have showed a lot about IFRS. It has showed that about one hundred and fifty countries in the next few years. I feel that it will eventually grow that the whole entire world will no longer use GAAP but will use IFRS. Japan is one of the country that is looking into IFRS. They plan to make a decision in 2012 and if decide to change it will be in effect in the year 2016. So people are wondering why some countries have to take so long to change. It will be a huge change for all accountants because everybody is familiar with Generally Accepted Accounting Principles.

I feel that IFRS is going to be a huge change for. Students that are in college right now are learning everything that they need to be a successful accountant. Everything that is being thought about accounting refers to GAAP. Everything that I know contains to GAAP. Graduating Seniors are ready to go out into the accounting field and for fill a future in accounting. I'm one of those students that are ready to for fill a career in the accounting field. I want to become a CPA one day. CPA stands for Certified Public Accountant. The CPA exam is schedule to change due to the change from GAAP to IRFS. I honestly feel that I wasted some of my time in college due to learning GAAP. Don't get me wrong I will still need to the general concepts and the different rules containing to GAAP. But eventually I will need to learn all the standards containing to the International Financial Reporting Standards. I wish that Bethune Cookman University could have talked to the students more about International Financial Reporting Standards. I feel that I will have a hard time adapting to the new standards due to that I'm familiar with GAAP and all of its concepts. I believe that it will be even harder for older accountants because they have being learning and using GAAP for numerous years.

There are varies Accounting activities that may occur within or outside an organization. Many people think that Accounting identified with privately owned and with profit-seeking entities. Examples of not for profit organizations are hospitals, universities, and governmental organizations. These organizations could be national, local, international; they can be very small or very large. They can also be an entire nation better known as in national income accounting. It has been said that Accountants help people to be successful, responsible participants in society, and ethical. Accountant's daily activities are measurements, communication, and observation. These activities are mainly analytical in nature. They can and draw on different disciplines which are mathematics, behavioral science, law, communication, language, and as well as statistics equations.

Many Accountants must identify the situation, analyze, and record. After recording as taken place they must accumulate facts, estimates the numbers, do some forecasting, and other data. Next they translate the data found into information that can be helpful for a specific purpose. This is known as bookkeeping. Bookkeeping is a common and very large manual activity. It is mostly done in small firms that don't have the most recent up to date technology. An example will be accounting software programs. With advances in the information technology and with it being a user friendly software, the clerical aspect over the past years has become largely electronically performed. This includes the use of internal checks and controls to assure that the input and output of the information are factual and valid.

Accountants design and maintain accounting systems, an entity's central information system, to help control and provide a record of the entity's activities, resources, and obligations. Such systems also facilitate reporting on all or part of the entity's accomplishments for a period of time and on its status at a given point in time. An organization's accounting system provides information that (1) helps managers make decisions about assembling resources, controlling, and organizing financing and operating activities; and (2) aids other users (employees, investors, creditors, and others-usually called stakeholders) in making investment, credit, and other decisions. Accountants have many major roles when providing information for making economic and financial decisions. There are many rational decisions that are usually based on comparisons of the estimates and analyses. This are typically based on accounting and the other data that projects more results in the future from alternative courses of action.

MART The Theory of Constraints is a management philosophy that focuses the resources of an organization on improving the performance of the constraint that directly affects the P&L. It is an approach to solve constraints and problems in a logical way by building a logic chart of the problem, finding its roots and developing steps to remove the root of the problem. TOC methods are used by managers and sales personal to improve the management and sales of their companies.Â

           TOC contends that the output of any system consists of a series of steps where the output of one step depends on the output of one or more previous steps will be limited, or constrained, by the least productive steps. The system's constraint dictates its performance and if we want to increase the system's performance we have to identify and explore the system's constraint.Â

           TOC involves adoption of special thinking processes which, in most cases, are different then the current thinking, but are logically accepted and used:Â

          The constraint is first identified. To increase throughput, flow through the constraint is increased. Throughput is defined as all the money that enters the company minus what it paid to its vendors. Â

         Once the constraint is identified, the next step is to focus on how to get more production within the existing capacity limitations, known as exploiting the constraint. Â

         The next step is to subordinate the non-constraint resources. Subordination is used to prevent materials from waiting in queue at a non-constraint resource that is running a job that the constraint doesn't need. Â

         After the non-constraint resources have been subordinated, the next step is to determine if the output of the constraint is enough to supply market demand. If not, it is necessary to find more capacity by "elevating" the constraint. Following this sequence ensures the greatest movement toward the goal of making more money-now and in the future. Â

           Once the output of the constraint is no longer the factor that limits the rate of fulfilling orders, it is no longer the constraint. Step 5 is to go back to Step 1 and identify the new constraint because there always is one. The five step process is then repeated. The entire purpose of the Theory of Constraints would be to allow a company to continue their path to be a successful company in the long run.Â

Having this method would keep them on track whenever they feel that they will have a down fall in the organization. One simple way of using constraint theory is to reduce throughput time by reviewing the processes in the factory and office from the time an order is received until it is produced and shipped. By identifying the bottleneck operations that are constraining fast throughput, and discovering where the problems are, several solutions may be found.Â

           Sometimes, it may be desirable to arrange the factory around the main constraint and balance production around the time of the constraint. In other cases, it may be desirable to increase the capacity of the constraint, and then test for adequate output. If output is inadequate, then the same process can be repeated for the operation that has become the new bottleneck.

The body of knowledge and analytical tools (the TOC Thinking Processes) that give power to TOC come from experience in the "accurate sciences" and are based on rigorous, but easily understood, cause-and-effect logic. These tools also provide the ability to support the development of breakthrough solutions through the premise that in the real world, all systemic conflicts that inhibit action are the result of unexamined assumptions that can be identified and corrected for true win-win solutions.

The TOC Thinking Processes, taken as a whole, provides an integrated problem-solving methodology that addresses not only the construction of solutions, but also the need for communication and collaboration that successful implementation requires. They have been used to create powerful generic, "starting-point" solutions for various business functions.

TOC is an approach to managing complex systems, i.e., organizations comprised of people working in interdependent, interacting processes. The objective of TOC is to grow a system's capability to achieve more of its goal, now and in the future. It consists of a "theory" of dealing with systems by identifying and managing constraints, which are often based not in the technical limitations of a process (that the tools of Six Sigma are so good in dealing with), but in the paradigms, practices, and policies of the people who are involved with them. Hence, a key component of the TOC "body of knowledge" are the in the logical thinking and communication tools known as the TOC Thinking Processes. These Thinking Processes, when used by people with intuition about the system in question, go a long way to providing what Deming refers to as "profound knowledge," and providing a way for managers to be able to better predict the outcomes of their actions.

With my reputation as a vocal proponent of the Theory of Constraints as a framework for management and improvement I often get asked about how it compares with Six Sigma. Coming from a pre-independent background that included working for a pre-six-sigma mature TQM, Baldrige-winning Company that was big into process management, I feel pretty comfortable in both realms. (Despite being a "sans-a-belt" practitioner.)

The two approaches do come to improvement from different directions, although that is not to say that they are in any way incompatible. But rather than rely purely on my own interpretation of Six Sigma, here's a description of it from the Six Sigma Forum.

The theory of Constraints is very essential to help individuals become better in management. They will have good time management and will learn how to solve problems that will give them give abilities that can help their company grow in the long run.  Having good management skills will give individuals the competitor edge they will need to grow so that they can be very successful once their businesses are off and running into the right direction.

DENNIS Vince Lombardi once quoted, "Obstacles are what you see when you take your eyes off the goal." Eliyahu Goldratt had drew out a clear understanding through his narratives "The Goal" and "The Critical Chain" why management cannot allow barriers to stop them from reaching the goal.

Eliyahu Goldratt develops a system call the Theory of Constraint. TOC was first introduced to readers in "The Goal". The constraints consist of Throughout, Inventory, and Operational Expense. TOC is basically a measurement to making money, which generally sets forth the general goal, is making money.

Alex Rogo, from The Goal, was first challenged by one of his former collegiate professors, Jonah, what was the goal for a plant. Alex had many good ideas of what the general goal was but nothing close to what Jonah was going for.

Later on in chapter eight of The Goal, Jonah briefly explains his scientific method for solving business organizations problems.

The first measurement Jonah explains to Alex is Throughput. Jonah simple definition of throughput was, "the rate at which the system generates money through sales." My terminology of throughput is a circular system. Once the manufacturers produce a product the next step is to make it a priority to sale that product. Throughput is the money the company receives for their service.

The next measurement is inventory. Jonah defines it as "all the money that has been invested in purchasing things which it intends to sell." I interpret inventory as, when the company manufacturers or purchases inventory, their intentions are to sale the product, basically a return on their investment (ROI). The reason why inventory is considered an investment is because the company expects a return for the money they invested on a product.

The final measurement of the constraint is he operational expenses. The definition that Jonah offered is "all the money the system spends to turn inventory into throughput." Basically what operational expenses are derived as the money you allocate to get the product to sell. Operational expenses can range from advertising to assist to sell product, direct labor put in to get customers to purchase. The operational expense is anything, whether it is indirect or direct, you can account for it.

When Alex presents the theory of constraints to his executive board in chapter ten, they were a little distraught that it was this simple to solve the plants problems. The terminology that the executives took on the measurements is throughput is the money coming in. Inventory is the money currently invested into the system or company and operational expense is the money a company has to pay out to make throughput happen.

The theories of constraints are very critical to helping businesses achieve their goal. The ultimate goal of any profit organization is to make money. I do not think anyone has a problem with making money. I think if you have an understanding of the market, then you should be quite successful as long as you have an understanding of the theory of constraints.

The Critical Chain Project Management is in great comparison with TOC. As I recall back in Quantitative Methods we discussed the project scheduling. Project Scheduling is basically to generate legitimate arrangements to get the task done in an orderly manner with no hesitation. The two essential steps in network analysis involve Project Evaluation and Review Technique (PERT) and Critical Path Method (CPM).

In relation to TOC, the measurements of operational expense are in direct relationship. In terms of operational expense under the project scheduling, operational expense can either be increased or decreased by crashing or fast tracking the critical path. Crashing is the concept of shortening the duration of the critical path activities by adding resources such as extra manpower, machinery and etc. Most of the time when crashing is affective increasing costs becomes a factor. Fast tracking is the concept of performing more tasks at the same time to keep the project on schedule while observing sequential order but transforming it into parallel order for time sake.

On the other hand critical chain management is fully aware when that particular business transaction will be complete. Under the concept of TOC, time is very optimistic because they are unsure when the products will be completed and skeptical when they will be sold to satisfy throughput.

Further on down the road I hope to one day take up a career in accounting, primarily focusing in the auditing field mostly fraudulent investigation. The measurements of TOC are very much an aid. When I have to do an audit I first have to do my research what type of business this is and what it produces statistics for turnovers and etc. After doing research on the background of the company, determining how revenue was made through sales (throughput) that include the cost of goods sold. Throughput information is located on the income statement. The next thing is to observe the operational expense located on the second half of the income statement. What needs to be looked over in the operational expense category is how the expenses correlate to the sales that were made and the inventory that was either manufactured or marketed to get the products sold. Finally I would observe how the inventory is recorded on the balance sheet. Preferably companies would record inventory as a current asset, that is fine but until they start considering that inventory is a liability. It may seem to them it is a liability but inventory is considered an investment and hoping to get the quickest return by selling that inventory to receive throughput.

TOC relates to managerial accounting in a very important way because it allows them to keep the company in a good standing. Moreover I hope to carry on the understanding of these measurements throughout to help my company achieve the ultimate goal, to make money. Some of the Late Night Discussion ties into Accounting. By me being an Accounting major I plan to learn from the Late Night Discussion. The Late Night Discussions that I think tie into Accounting are discussion number two, three, and five. Below are discussion two, three, and five. One talks about purchasing. Purchasing is a major factor in the accounting field. Discussion three is about the transferring of prices. The finally discussion is about operating expense. I feel that purchasing, transferring of prices and operating expense plays a major role in the accounting field.

In discussion two, the focus is centered on how to turn an excellent decision a disaster. The discussion is trying to reduce vendors down into a single source vendor, and will it help in the end. Alex is explaining why the reducing vendors are necessary, by stating that it may open up an opportunity to maybe become some sort of a partnership through steady transactions. In addition, the vendor will be more coordinated with the company, which will help adjust to the companies needs. When reducing your vendors all of this may occur, but on the other hand negative factors may occur as well. An example of negative factor may be forcing your single vendor to improve on frequency of delivery, which will enable the company to hold lower levels of inventory.

In the world of the single source vender and the company, purchasing is a major factor. When purchasing, instead of spreading efforts one can simply shorten its vendor's base. Because of its shrinkage a company can get lower prices out of the vendor and purchasing can better be in positions to know the problems of the vendor and the vendor can be more familiar with the company's needs. Whilst salaries are being paid out, a company can see the outcome on its bottom line. Advantages of moving the single source vendors are less paperwork and bureaucracy. Less paperwork equals fewer expenses just by saving the price of paper. The single source vendor does not really have anything to do with reducing operating expenses. However, the major impact of the movement to the single source vendor lies within the money generated by the company itself, which is throughput.

Purchasing will allow anyone to figure out what vendors actually have problems. In addition, it can make companies adjust to any changes that they go through. However, if there were any distraction, it would lead to failure in trying to allow the single vendors to be understood. Single vendors also has less paperwork and less bureaucracy, which means that is not much work to stress out over of because of the work that comes with the work of the single vendors. A person can save money on operating expenses where paper can be save in the process of having changes to the single vendor.

There are many benefits to having a single vendor operation system. There will be more inventories to give with very low levels of inventory prices. Most companies have to do this process so that the company can stay afloat. The single vendors can be also known as medicine. Why is that? Because once a company is doing too well with making profit from other organizations, single vendors is then injected into these organizations so that they will help the company better. More and more inventory will then come in so that it can allow the companies to have more resources to make more invention that we see every day.

As learned in a previous discussion inventory could be a negative factor in some cases, but this is not the same atmosphere. According to the discussion it is not the major impact of single sourcing, but something of throughput instead. The term throughput is the rate in which a company or generates its sales. If given the same selling prices, any dollar the company refuses to pay the vendor is a dollar added to its throughput. Therefore, in conclusion, it could possibly be harmful in the future if not monitored thoroughly.

In discussion three between Alex and Jonah focuses on the problems that occur when dealing with transfer prices. In the beginning of the discussion, both conclude that measurement is an important factor when it comes to transfer prices. When talking about transfer prices you must take into consideration the company's goal, safety margins, and all necessary conditions. As the conversation continues, a question is raised, "What do transfer prices have to do with measurements?"

Transfer prices are calculated by using cost accounting, which leads to the desire to inflate production cost by slowing down non-constraints. Alex explains that transfer is between not only the company and the outside world, but also goods transferred between the units. There are the same units that Alex has to implement a new test for, measuring the performance of these units.

After looking at all of the relevant factors, for example, the company is relatively large and it has several units participating in the generation of the same products, in which they noticed that in production there is a transfer of goods not just between the company and the competition but also goods that are transferred between the units. This discovery led to the question of how to measure the performance of a unit. In conclusion, they came to realization that the measurement of a unit is essential, but there are many problems in trying to accurately calculate these units.

The reason for these problems is when units are transferred partially completed, that it causes problems of generating sales and or purchase price between the units, which is the transfer price. Alex and certainly Jonah concluded that there is no accurate way to fix transfer prices.

Jonah explains in the discussion how sister companies of their big companies are tending to buy components that can help to buy things on the market. This would give them to ability to have established some creditability with their big companies. There is a way one can find out how to transfer prices from one organization to another, but it is very hard to do if there is not enough data to help find the correct hypothesis to solve these difficult equations.

Any given or found problem would allow someone to know how to find the hypothesis of the transfer prices. Some companies allow other companies from the outside to buy so they can keep up with the competitors. Doing this would allow them to stay afloat and it will not cause bankruptcy in the company that is allowing them to buy profits from them. Money shouldn't not be used to the means of measurement, because it would confused the entire problem and make it where no one would be able to find out what actually would be the solution to the problems that would help resolve the problems so that prices can be transferred from one place to another. One can say that so far it would be very hard to actually know how to solve the problem, because there are so many ways to the problem can be looked at. If it is looked at incorrectly, then it will never be figured out.

Discussion five that Alex and Jonah are having this time on discussion is based on the success of the Japanese. As the discussion engages, Alex is excited about how a particular nation who is empowered by a guiding statement. This intrigued Jonah, which opens the discussion on how the Japanese are so successful in the market.

Alex and Jonah go through a series of factors to narrow down what is the core statement the Japanese follow to success. Alex and Jonah agreed that the Japanese could not have gained this type of success through concentrating on savings in operating expenses, favorable currency rates, but rather something that has a major impact the raise throughput. Also during the discussion, they came across the fact that the Japanese believe that inventory is a form of liability, so inventory is only a step in a more complex equation.

After thoroughly evaluating how inventory works, the conclusion is that inventory could either help or hinder the progression of the company given specific circumstances. Alex and Jonah came to the assumption that the reason for Japan's success has to do with the ability to repeatedly increase throughput. In addition, they believed that the Japanese has broken the mold of cost accounting to the degree in which the Japanese understand that product price is a concept that derives from product cost and product margin. The lean economic times of the 1990s caused many of Japan's biggest manufacturers to downsize and move their production bases overseas. This prompted some researchers to express concern about whether Japan would soon be replaced as a manufacturing powerhouse by China, South Korea, and newly industrialized countries. Yet now that the gloom has lifted, it is clear that many Japanese manufacturers have not only survived the lean years but have emerged stronger and more profitable than ever. Auto making is a good illustration of an industry that relies on the integration approach. Here, success requires using advanced technology to organize an overwhelming number and variety of parts and components. The expertise required to do this is a black box even within the manufacturing companies themselves. In Japan, the integration approach is used extensively in the manufacture of some consumer electronics products, such as flat-panel TVs, relying on advanced technologies not available anywhere else. Using technologies that cannot be replicated in other countries enables Japanese companies to make high-added-value products. The key to Japan's success in global markets lies not in simply assembling products but in nurturing companies with the cutting-edge technology that will enable them to take advantage of the integration approach.

Throughput accounting deals with cost accounting. It was discovered by Eliyahu M. Goldratt. Many people thinks it deals with activity based costing but it doesn't. Throughput Accounting doesn't allocate costs to products and services. It is done to increase the velocity. This allows products to move through an organization. This is done by taking away bottlenecks within organization. Cost accounting used to measure efficiency. It is said to be that outside the organization uses the internal accounts for investments. Throughput accounting is known to improve profit performance within the organization. This allows better management decisions. There are three different types' monetary variables. The three types of are throughput, inventory, and operating expense.

Eliyahu starts to think about varies situations. He came up with the idea that each and every organization has a goal and also has good decisions that increases its achievement that value. It has been said by Eliyahu Goldratt that the goal for maximizing profit in a firm is stated but to increase profit now and in the future. Throughput accounting is really organization that is not for profit. But it has to develop some kind of goal that has to make sense in all the individual cases.

Throughput Accounting also pays particular attention to the concept of bottlenecks in the manufacturing or servicing processes.

Throughput is the T. Throughput is known for the rate at which a system produces something called goal unit. The rate at which money is generated by the system through sales (Total Sales - Total Variable Costs)

Investment is the I. Inventory is known for the money that is tied up in the system. All the money that the system invests in purchasing things it intends to sell. It deals with machinery, assets, liabilities, inventory, and buildings. It used to be said that the (I) was changed between Inventory and Investment.

Operating expense is the OE. It is the money that the system spends in generating the goal units. All the money the system spends to turn inventory into throughput. The operating expense is the cost of raw materials. Maintenance, utilities, rent, taxes are all examples of operating expense.

There are three questions that managers should think about if they want their organization to increase their understanding of The Goal. Will they propose change? The first question is will they increase throughput. If yes how will it be done to increase the throughput? The second question is how you will reduce investment/inventory. This is also money that can't be used. The finally question is how you will reduce operating expense.

There are several answers to the questions above to help you determine the effect of proposed changes. It is also based on system wide measurements. The answers are as follows:

Net profit equals Throughput minus Operating Expense. The second equation is return on investment equals net profit divided by investment. The third equation is productivity equals throughput divided by operating expense. The finally equation that you can use is investment turns equals throughput divided by investment. All of these equations are important when trying to decide if the effect of proposed changes has occurred.

An example of TOC success story dealing with accounting is with mangers using Standard Costing. The problem was that some managers was using Standard Costing or better known as Activity based Costing for their decisions. The managers realized that GAAP which in Generally Accepted Accounting Principles was developed for regulatory purposes. The solution for this problem was pretty simple to come to a conclusion. The TOC solution was said that throughput accounting does not have anything to do with the allocation cost of the products nor services. It increases the rate. This allows the products and services to be moved through an organization by eliminating bottlenecks within the organization to help maximize the organizations profit. It has said to be that throughput accounting helps improves profit performance. This allows better management decisions by using measurements. This allows closer of how the effect of decisions on three of the critical monetary variables which are throughput, inventory, and operating expense.

Another example of TOC success story deals with Finance. I'm not a Finance major but finance also ties into accounting in different varies forms. The problem with this story is that there are numerous unhappy customers, low profits from mortgages, and a good amount of frustrated staff members. Many organizations deal with this types of problems all the time. There were several outcomes to the problem. The first one was that on-time delivery was improved. The closing dates are now meeting the rate better than ninety-nine percent. If something is not delivered on time it is because of other outside circumstances. There use to be several member of the organization complaints because of expired rate locks. These rate locks have seem to disappear over time. Something know as EFFCU has allowed accommodation to members purchase. The need for employees overtime as also seems too decreased. The elimination of outsourcing and decrease in overtime expense has risen the profits to twenty-four percent. Management has talked about doubling the systems capacity. I see that this was a truly good successful story because it opens my eyes to see that TOC really does work.