Accounting profession

Accounting profession and accounting information systems

                                                             Research topic statement

The topic of this research paper is the organizational research and theory. The research paper will study the impact of organization outcomes with the use of the accounting information systems for decision management and control.

The research is focusing on the importance of the accounting profession and the accounting information systems in an organization. It will be based on the impact they have on the outcomes of an organization and how it can be improved to achieve its objectives.

Hypothesis: The purpose of the study is to show how the accounting information system will influence the working of the personnel in the organizations and help in the decision-making process. We will use the hospital as our case study so that we can understand the impact that this information has on the physicians.

Introduction

            This is a research paper that is studying the impact of the accounting information system on the management structures. It falls under the organization research and theory. This will involve the study of how the accounting information is used to make management decisions. Accounting information is very important because it shows the financial position of the organization. Accounting information is produced in the summarized final accounts of the organization. The final accounts include the balance sheet and the trading, profit and loss account. These accounts are prepared at the end of the financial year so that they can be presented to the owners of the business. This is done during the annual general meeting of the organization and hence this information presented by the accountant will help in decision making by the owners of the business. It is therefore imperative that the outcome o f an organization performance is very important in the decision making of the organization.

Use of the Accounting Information System

            Other than this information showing the current state of affairs of the organization, they show whether the organization will be in a position to continue in operation for the foreseeable future. This is referred to as the going concern of an organization. This is an important aspect because the decisions are made to affect the future and not the past. Therefore, this will be a progressive measure that will help to improve the performance of the organization. The accounting information is used by other people in decision-making. Such persons include the creditors, the financiers, customers and prospective investors in the same field. The creditors will require the accounting information to know whether the organization will be in a position to meet their dues. The financiers will want to know the credit worthness of the company. This is shown by the liquidity of the company that shows whether the organization is in a position to meet its obligations as they fall due (Jones, 2009). This is very important because the financiers will be in position of knowing whether the organization will be able to pay their dues when they offer them a loan facility. The customers will want to know whether the organization has the capacity of meeting their needs at the correct time. Therefore, the organization outcome is an important aspect that is used in the decision-making in an organization.

The organization outcome is verified for accuracy before being presented for decision-making. This is done by an independent person, the auditor, who is not an employee of the company and he makes an independent opinion about the accounting information that is presented. He is the shareholders watchdog in an organization and he is supposed to make an independent decision of whether the information presented shows a true and fair view of the status of the organization. He is the bridge between the agency relationship that exists between the management and the owners of the organization. This sensitive nature of the accounting information has necessitated us to do a research that will ensure that the accounting information is not distorted at all.

As observed above, accounting information has several roles that it plays within an organization. We can do a research in a hospital context to show the importance of the accounting information system. Accounting information system will involve the records that are kept in a hospital to ensure that there is smooth running of the affairs of the hospital. Favorable accounting information is very important in a hospital. This will help to motivate the physicians in the performance of their duties. The accounting information system is also an important tool that helps to reduce the corruption that may occur in an organization. It will help improve transparency and therefore it reduces chances of negligence of the doctors. Accounting will help in ensuring that duties are performed as they are supposed to be because accounting information does not focus on the numerical outcomes only but concentrates on all aspects of the organization that will influence the results of the organization. This makes it to have a positive impact on the organization. This is done through the auditor who is required to study all the aspects of the organization to give a report to the owners of the company.

Accounting information has also been applied to account whether the needs of the patients are being met in an organization. When there is favorable accounting information, it means that there is a high level of customer turnover. In a hospital context, this means that there are high numbers of people seeking the services of that hospital. Therefore, this is a sign of good services that are offered in the hospital and this motivates the physician. They will be happy for a job well done and hence it will improve their performance. The performance of the organization will improve when the accounting information is applied in the two important perspectives. Accounting information is both an out of the governance process and an input. It is an output in the sense that it is produced by the managers and an input because it used in the decision-making within the organization. In hospitals, accounting information will also have some great impact on the welfare of the physician. Accounting information has been used to determine the remuneration of the workers. In hospitals, it is also, applicable that performance-based   payment is made. As a result, when the performance of the organization is good, the physician will get some handsome remuneration. Therefore, work of the physician is directly related with the accounting information that is presented because the no of people who visits the hospital is proportional to the level of services being offered.

Authority structure

            In organizations, there is a defined system of authority. This provides a chain of command where the persons are required to report to the persons that are higher than they in authority are. In organizations, the highest people in the chain of command are the owners of the organization. They hold the ultimate power in the organization and they make the important decisions in the organization. They perform the appointing of the managers of the company. This gives rise to the agency relationship where the owners or shareholders are the principal and the managers are the agents. Therefore, the managers do the reporting to the shareholders. The immediate persons in the chain of command are the board of directors. They oversee the running of affairs of the company. They are also appointed by the shareholders. The board of directors can appoint the managers when delegated the mandate to do that by the shareholders. After the board of directors, there are the internal auditors, audit committee, accountants and other senior staffs of the organization. When these people perform their work as they are supposed to do, it will lead to quality production of information and hence it will ensure that there is integrity, transparency and quality of financial statements. Our research is therefore important because it will assist us to identify the various authority structures.

In hospitals, there are similar structures as identified above. These structures include the owners, board of directors, managers, accountant’s, internal and external auditors and the audit committee. In addition, there are departments that run the various activities of the hospital. The departments will be divided in accordance with the relevant functions that they perform. This hierarchical organization is very important because it helps in defining the authority and the responsibility. This form of organization will help in increasing the loyalty of the persons under that department. It will also ensure that there is better performance of the relevant duties. This structure is also appropriate to the hospitals because it ensures that the organization is divided in accordance with the relevant specialists in a certain field. For example, a department that deals with children matters only can be in hierarchical system. This has some advantages and disadvantageous to the organization. This is because there may develop a communication problem especially horizontal communication. This may be because of rivalry within the department. This can affect the performance of the organization if necessary measures are not taken. There can also be some conflict across departments that can be a draw back to the performance of the organization. Departments may make decisions that benefit them rather than benefiting the organization as a whole because of departmental rivalry.

The structures displayed above are important because they define the flow of information within the organization. Accounting information system is therefore useful in this structure because the information will be used to evaluate the performance of the organization. This information will be used to analyze whether the authority structure that is in place in an organization is viable. This will be checked in terms of the outcomes of the organization and the number of departments within the organization. If the organization is performing poorly according to the accounting information, the organization should consider cutting down the costs of the organization. They can do this through reducing the administration costs by reducing the departments and the number of people in the administration. In addition, accounting information is useful in identifying the well performing managers and the poorly performing managers. This can be identified through analyzing the various departmental accounts (Jones, 2009). The poorly performing managers may be deemed incompetent in their job and therefore they can be laid off or given warnings. Therefore, accounting information provides an important tool from which we can use to manage the affairs of the organization. Other than this use, this information can also be used to determine the remuneration that the managers will receive. This is applicable in instances where the remuneration of the company is performance based. Therefore, accounting information has a great impact on the operation of the authority structure of an organization. The above structures form the formal structures of the accounting information system. These structures ensure the smooth running of the organization.

The Finance director is the head of the finances in an organization. Under him is the chief accountant. Chief accountant is the head of the accounting department. He is responsible for preparing and presenting the accounting information to the financial director who presents them to the manager and then they are finally taken to the shareholders. Within this department, there is the internal auditor. He is an official of the organization and he is supposed to ensure that accurate financial statements are prepared and that they comply with the relevant standards. He is therefore an official who ensure that there is transparency within the organization. As observed in this authority structure, it is imperative that the accounting department is checked carefully to ensure that the organization does not experience problems. Research on this department is therefore important because it will help identify the best authority structure that will assist to maximize the organizational goals and minimize chances of fraudulent practices by the staff. Activities to be researched on would include investigating measures that can be put in place to ensure that the internal auditor does not compromise his role. The structure of the department should also be organized in a manner such that there is no duplication of duties. This useful measure will ensure that the administration costs of the department are reduced. This measure will lead to the improvement of the organization outcome. The accounting department plays an important role in an organization because it deals with the cash and hence it is the backbone of the organization. This is important because it determines the liquidity of the organization. If it is poorly led, it will amount to the losses to the organization.

Research study

            In our research of the accounting information, various variables should be considered. Our research will focus on the general impact that the accounting information has on the personnel in the organization. Therefore, we will focus on the job satisfaction, job attitudes, personality, motivation, leadership and the organization design (Jones, 2009). We focus on these variables because the accounting information is being used to satisfy the workers. When the personnel are satisfied with their work, they get the job satisfaction and they will eventually perform well in their work. It is evident that these variables are mainly focusing on the personnel and their behavior in the organization because of their use of the accounting information. Other than the workers, we will also focus on other users of the accounting information. This is important because we will be in position to know the impact that the accounting information will have on them. Therefore, this research will have a great impact on the performance of the organization.

Formal authority

            When we focus on the authority structure of the accounting department it will help us to determine its efficiency and the measures that can be put in place to ensure there is favorable organizational outcome. In addition, it will focus on how the relevant departmental requirements have been employed. Therefore, research on the formal authority will help to understand the measures that have been put in place to ensure that the accounting information shows a true and fair view of the state of affairs of the organization. This is ensured when all the personnel in the department perform their work in accordance with the necessary provisions. Such people include the internal auditors.

Design characteristics of the Accounting information system

Accounting information should be accurate. This means that it should be from any errors. Accuracy will help us to make correct decisions. Accounting information should also be consistent (Eisen, 2007). Consistency is important because it will help us have consistent organizational reports on performance. In addition, information should be relevant to the persons that require it. Relevance is important because the users of this information will be in a position to make viable decisions in their work. Finally, the accounting information should be timely. It should always relate to the relevant period. Timeliness will also ensure that the accounting information is available when required. Therefore, decisions will be made within the correct accounting period. With the understanding of these characteristics, it makes our research simple since we will focus on how these characteristics impact on the organizational outcome. In addition, we will be in a position to identify whether they are satisfied accordingly. This forms the basis of our research. Our research will help us to understand whether the accounting information produced complies with these characteristics.

Budget information

            In our research, the main source of our data will be obtained from people. It will focus mainly on the users of the accounting information. These are required to state the purpose of the accounting information in their decisions. In addition, they will be required to state whether the accounting information meets their needs and if it does not, what they expect to get from it. In this reference, we can use the questionnaire or interviewing type of research. These are important because they will help us to get information directly from the users of the accounting information. This method is convenient and cheap because the information will be readily available.

In the questionnaire method, a list of questions is prepared and the respondents are required to answer with a yes or no. Therefore, the method avoids irrelevance on the part of the respondents. In the interview method, there is a one on one interaction with the respondents. Therefore, these research methods require transport expenses. In addition, the questionnaires will need to be printed and be produced in large numbers so that we can collect enough data. Other than these methods, we will do a direct observation of the accounting department. This will help us to gather information about the authority structures. It will also be useful as we will be able to identify the problems facing the department and the possible measures that can be done to reduce these problems. This method requires the researcher to have some knowledge about the accounting department. We will require the following budgetary estimates to complete our research successfully.

 

Expenses	Amount
Transport costs Wages Printing costs Questionnaire papers Meals Respondents costs Data analysis costs	$ 300 $ 500 $ 100 $ 70 $ 50 $ 100 $ 60

Analytical method and results

            The information collected will be used in to design an accounting system that will comply with the issues raised. There will be a critical analysis of this information and it will be used to improve the performance of the accounting department and the profession in general. It will also be used to restructure the accounting system so that we can obtain reliable accounting information that will help to improve the organization outcome.

Conclusion

            In conclusion, we observe that the accounting information plays an important role in an organization. This necessitates our research so that we can identify the problems that may be experienced within the accounting department. It is also important because we will be in a position to achieve the organizational goals that are necessary to ensure favorable outcomes. When we get these funds, they will help us to do a through research that will have a positive impact on the organization outcomes.

 

 

 

Reference:

Eisen, J. P. (2007). Accounting. Hauppauge, NY: Barron’s Educational Series.

Hall, A. J. (2008). Accounting Information Systems. New York, NY: Cengage Learning.

Jones, G. R. (2009). Organizational Theory, Design, and Change. New York, NY: Prentice Hall