Accounting Terms and Concepts Essay Example | Topics and Well Written Essays - 250 words

Accounting Terms and Concepts - Essay Example Owner’s equity can therefore be determined by subtracting the value of all liabilities from assets’ value as shown in the following equation (Warren, Reeve and Duchac, 2011a). Communication of economic information to relevant stakeholders is one of the roles of accounting systems that ensure accurate data on an institution’s financial activities. Accounting systems also establishes frameworks for developing and managing organizational culture and interpersonal relations among an organization’s stakeholders. The systems achieve these through outlining values and standards for practice (Macintosh and Quattrone, 2010). Development of complex Information Technology systems has improved accounting work through computerized accounting and analytics for financial analysis. The technology has simplified the accounting process and improved accuracy through its electronic applications. Advanced Information Technology has also improved time efficiencies and ensures updated information for managerial functions (Warren, Reeve and Duchac, 2011b). Integrating accounting systems with systems of other departments in an enterprise is necessary because of its associated advantages to both accounting personnel and other users of financial information from other departments such as line managers and top managements. The involved data interoperability avails information to all internal stakeholders and therefore eliminates complete reliance on financial accountants for information, a factor that facilitates timely decisions in other departments. Integrating accounting systems also relieves accountants of the communication role and promotes their efficiency in consultancy services to other users of financial information. Further, integrated systems facilitate faster transfer of financial updates to all departments for informed decisions and actions (Maher, Stickney and Weil,