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Essay / Research Paper Abstract
This 7-page paper hypothesizes that accounting systems aren't necessarily enough to do as they claim; to provide useful information to corporate stakeholders. Bibliography lists 3 sources.
Page Count:
7 pages (~225 words per page)
File: D0_MTacctconv.rtf
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Unformatted sample text from the term paper:
decisions. These stakeholders can range from upper management, which must decide if there will be enough money to launch a new product line, to the corporate shareholder, who needs to
know if hes going to get a good return on investment, to the bond agency, that needs to decide the creditworthiness of the company.
Another concept behind financial accounting is that in presenting specific, financial information, the process must adhere to a strict and rigid set of guidelines by an oversight
agency. In the United States, that agency is the Federal Accounting Standards Board (FASB), with the structure dubbed U.S. Generally Accepted Accounting Principles (US GAAP).
While GAAP and similar systems do an okay job of "numbers crunching," in recent years, there has been battles between those who believe that rule-based accounting (i.e.,
GAAP) doesnt tell the whole story of the firms investments. It doesnt tell the story of its social, political and environmental costs. This was born out in 2001, when Enron
executives managed to pull the wool over stakeholders eyes before sucking the value out of the company and driving it into bankruptcy, wiping out retirement plans and investment plans for
thousands of people. Enron, technically, followed GAAP procedure. There is nothing in GAAP that says companies cant push debt of balance sheets into special purpose entities. Where Enron did wrong
was in the way the SPEs were used - and accounting experts now wonder if the more flexible accounting principles framework might have prevented an Enron implosion; or, at the
very least, might have warned stakeholders before the bottom fell out. The "conventional" definition of accounting (at least by the FASB) is
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