Accounting is the process of analyzing financial data of a business and preparation of financial statements. The financial statements are used as a communication tool presenting a business's performance to the public (Sharif, 2017) . He stresses that business managers must hold proficient knowledge and experience in accounting since they act as the main link between the business and its operating environment. Sharif emphasizes that managers must also be well-versed in the preparation, analysis, and interpretation of financial statements. The primary role of managers is overseeing the operations of all departments in a business. This position requires them to be experienced in all scopes of accounting, such as financial accounting, cost, and management accounting.
Knowledge in financial accounting will enable them to interpret financial statements, understand financial ratios, gauge the performance trend, and make appropriate decisions. Managers can only ascertain a business's operating costs and make resource allocation decisions by applying cost accounting knowledge. Management accounting integrates cost and financial accounting knowledge in planning, budgeting, and decision making (Shields, 2015) . Managers can apply tax accounting knowledge in a tax relief negotiation scenario. Such a situation may occur when the business is obliged to pay excess tax compared to its taxable income. Thus, the management must intervene to ensure that the tax charged by the government is commensurate with the profit levels of the business.
Delegate your assignment to our experts and they will do the rest.
Accounting information is used internally not only by the management but also by employees and shareholders (Sharif, 2017) . The administration relies on financial information to understand the business's performance in terms of profitability and assets, assess the productivity of employees, and determine market share and competitive strength in the industry. Shareholders are mainly concerned with the business's performance and growth to ascertain the security of their assets and the value of their dividends. Employees use accounting information to gauge their remuneration rates against the financial results of the company. Sharif notes that financial statements may portray bankruptcy and the potential collapsing of business. This scenario would necessitate appropriate action by the management, shareholders, and employees to save the company.
References
Sharif, A. (2017). Accounting as a Language of Business.A Study of Conceptual Understanding.
International Journal of Scientific Research and Management . https://doi.org/10.18535/ijsrm/v5i11.09 .
Shields, M. D. (2015). Established management accounting knowledge. Journal of Management Accounting Research , 27 (1), 123-132. https://doi.org/10.2308/jmar-51057
