A Brief Introduction to Managerial and Social Uses of Accounting

A Brief Introduction to Managerial and Social Uses of Accounting

A Brief Introduction to Managerial and Social Uses of Accounting

A Brief Introduction to Managerial and Social Uses of Accounting

Excerpt

The social value of accounting lies primarily in the direct utilization of accounting information over a wide range of public and private financial and economic decision-making. Substantial use of accounting information occurs in: (1) financial markets of various types; (2) planning and operating private business enterprise activities; (3) planning and operating public sector organizations and programs; and (4) initiating and administering financial and economic policies at state, national, and international levels. In addition, accounting information is used in such activities as collective bargaining, nomination and election of or confirmation of persons for public office, applications for personal credit, employment growth opportunities with individual firms or organizations, and many other human endeavors that have a financial or economic dimension. If usefulness of accounting information is a critical variable that justifies the existence of accounting as a field of study, then accounting courses and accounting textbooks should not neglect the treatment of the application of their subject matter. Therein lies the motivation for the creation of this book.

Over the last decade, academic study of accounting has become so complex and so interdisciplinary that separate introductory textbooks on the two main applications of accounting information-namely, financial and managerial accouning-have developed. This positive development allows a stronger focus on applications in special areas, even though the conceptual structure of the accounting discipline is the same wherever or however its results are applied.

However, as with most innovations, there are also some concurrent negative effects, most important of which is the standard practice of teaching the first course in accounting with an emphasis on financial accounting. This leaves beginning students with the impression that accounting serves primarily the needs of investors and creditors operating in financial markets. The misconception corrects itself for those students who continue their studies in accounting, but a sizable . . .

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