The Role of Accounting on Business and Our Society Essay - 1

The Role of Accounting on Business and Our Society - Essay Example It entails the earnings from provision of goods and services less the cost incurred in providing those goods and services. Thirdly, the statement of owner’s equity reports on the activities of shareholders during a given period of time. It shows how much the business received from shareholders and how much went back to them in terms of dividends. It shows the portion of a business entity’s earnings that goes to shareholders, thus the reference to it as a statement of retained earnings by some companies. Finally, the cash flow statement shows sources of cash during a given period of time and its uses. To me, the income statement is the most important. This statement shows how much a business entity earns within a given period of time (Gibson, 2012). Of course, businesses are established with the purpose of making profits and creating wealth for its shareholders according to Mittal and Singal (2007). Therefore, if a business posts losses on this statement, it does not serve the purpose for its existence and should be wound up. However, if it records profits, then the venture is sustainable and meets the intended objective. 2. An accountant would be that person with a bachelor’s degree specialised in accounting or any specialisation in finance. At times, an accountant would be that person who has gained experience dealing with financial matters over time. The roles of search persons have historically been bookkeeping. They prepare financial records and maintain them. With additional professional certification, then such an accountant would qualify as a certified public accountant, CPA (Walker, 2012). This comes with greater roles as CPAs conduct financial audits thus fostering transparency and accountability. Such a person holds public trust and should be fact-based, non-ideological and nonpartisan. The arguments for accounting include its role in giving objective and unbiased information on the