Accounting Financial Analysis Report Business strategy

Question: Discuss about the Essay for Accounting Financial Analysis Report for Business strategy. Answer: Introduction:- The role of accountants has changed greatly in the modern business scenario. In earlier days, accountants were treated as mere scorekeepers. Nowadays, with the evolution in accounting systems and introduction of new branches of accounting, accountants are now considered as the source of important managerial information. Like the marketing and production departments, accounts departments are also taking active participation in the growth of the businesses. Such revolution in the role of accountants has become possible due to growing importance of various financial information. Now the success of the business firms not only depends on its revenue earning activities but also on its market growth, stock prices and other non-marketing activities. Moreover, the business firms also use to rely greatly on various internal external financial data to measure its growth over the periods, its market position and also the market position of its competitors. All these information and analysis have helped the accountants to transformed into one of the important personnel within a business organization. Role of Accountants in Enhancing Profitability:- As discussed above, with the advancements of the accounting procedures, accountants are taking active roles in enhancing the profitability of the business firms. Apart from the traditional bookkeeping activities, accountants are also undertaking various other financial activities as the part of their job. The major portion of the total expenditure of any business entity is used to be covered by the operating cost. Therefore, accountants use to focus on the operating activities to control the operating costs and increasing the profit margin of the entity (Ward 2012). Accountants use to assess various internal external risk factors of the organization. Through the risk assessment process, they are able to provide a steady and secure revenue structure and diminish the level of various unpredicted and unpredicted losses (Biddle et al. 2015). By analyzing various financial and non-financial informations, accountants can guide the management for developing a suitable organizational structure, which can perform more effectively and reduce the various abnormal costs (Ah Lay and Jusoh 2014). Accountants also help the marketing team to develop better customer relationship management. Accountants use to study the past records and current market scenario carefully for providing guidance about how the marketing can satisfy the customers more effectively (Laine et al. 2016). The stakeholders have become very much important nowadays for a business organization. The business firms always target to satisfy their stakeholders by its financial and non-financial performances (Kim et al. 2013). Accountants play major role in fulfilling the needs of the stakeholders. They use to focus on the basic needs of different stakeholders and help the organization to fulfill those needs by providing suitable strategies and guidelines (Elbashir et al. 2013). In these manners, the accountants have changed their roles and upgraded themselves as one of the key factors of the business organization for enhancing the profitability. Moreover, the new accounting procedures are also used to assess the profitability of the market investments. Therefore, many accountants have started to act as financial advisors, who use to provide advises on proper investment plans to the individual investors, as well as, the corporate houses (Biddle et al. 2013). Malpractices for Enhancing Profitability:- It has been observed that many organizations use to utilize the accountants for enhancing the profitability by any mean. Not only the organization, but many accountants also use to concentrate more on the profitability factor. Due to such over concentration on profitability, many accountants are following unethical ways to increase the profit margins of the company (Gilley et al. 2014). In many cases, the employees of the organizations use to be more concern about the net cash payments in comparison to the long-term benefits, provided by the employer. Many accountants use to capitalize this situation and develop such payment structure for the employees, which will reduce the long-term benefits. By this process, the overall cost for employees uses to get decreased and the company maximizes its profit. It is a very common practice amongst the accountants to manipulate the financial statements for reducing the tax amounts. Accountants use to prepare the financial statements in such a manner that the net income as per the books would be lower than the actual net income, earned by the company. Thus, they help the company to pay lesser tax amount to the government (Imoniana and Silva 2013). Sometime, many business firms use to take huge loans from various financial institutions and the owners use to utilize those funds for their personal growth. To avoid the payment of the creditors, the accountants of such firms use to manipulate the financial data in such a way that the firms use to be declared as bankrupt by the concerned authority and the owners would not have to pay any amount to the creditors out of their own fund. In modern days, most of the companies continue its operations by either equity financing or by debt financing. To attract the potential financers or investors, it is very necessary to maintain a proper financial growth, especially for equity financing. Accountants use to make this task easier by exhibiting overvalued assets and profits in the financial statements (Ghose 2015). The accountants of many institution use to develop such complex marketing plans, which seems to be more profitable for customers, but in reality, customers do not get any extra advantage from such plans. In this way, they help the firms to increase the sales volume by giving false commitments to the consumers (Devi 2015). The accountants use to get the scope of such malpractices due to various reasons. Different accounting standard boards use to provide different accounting treatment for same accounting transactions. Moreover, there is a huge difference in the net income assessment technique for taxation purpose and for general reporting purpose. The accounting boards do not provide any clear guidance for some of the accounting procedures, such as fair value accounting, CSR accounting etc. In many cases, the stakeholders, such as employees, investors etc., do not use to be fully aware and sufficiently knowledgeable about the accounting and evaluation procedures. The accountants capitalize these drawbacks of the accounting system to increase the profit for the company (Imoniana et al. 2013). Conclusion:- The accountants are employed for maintain the financial records of the organization. In the modern scenario, the accountants are expected to provide more benefits to the company. They are expected to increase the profit margins by the various accounting techniques and financial planning. Hence, the accountants use various advanced accounting methods, such as management accounting, customer accounting etc. for providing better service to its employees. Along with the financial planning, they are utilizing their professional knowledge to help the organization for various other planning related to the non-financial activities also. By different market analysis methods, they can forecast the future outcomes of the company, as well as the outcomes of its competitors. They can help the organization to reduce its costs and expenditures by proper cost planning and budgeting. Through these processes, the company can also enjoy various tax benefits. Thus, the accountants, nowadays, play a major role in the profit maximization for the company. The new role of the accountants has created the extra burden on them to increase the profit for the company and its owners. They are forced to adopt unethical procedures to make the company more profitable. Sometimes they manipulate the financial records for reducing the tax expenses or attract more stakeholders. In some cases, they implement unethical planning, which use to deprive the consumers, employees or the investors. Therefore, it can be stated that the role of accountants for enhancing the profitability has caused only positive impact on the society. It has come along with many negative traits also. But it should be noted that most of the time, the accountants use to utilize their knowledge for such unethical causes as per the instruction of the company management. Hence, the accountants cannot be blamed solely for such misusage of professional knowledge. Reference List:- Ah Lay, T. and Jusoh, R., 2014. Business strategy, intensity of competition, strategic role of accountants, strategic management accounting and firm performance. Biddle, G.C., Kim, J.B., Ma, M.L. and Song, F.M., 2015. Accounting conservatism and bankruptcy risk.Available at SSRN 1621272 Biddle, G.C., Ma, M.L. and Song, F.M., 2013. 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