Unit 1 Ip MACC – Essay Example
Internal Memo Chief Executive Officer Manager, Accounting Department ______________________________________________________________________________
With reference to our discussion regarding the hiring of extra personnel within accounts department, I furnish following insight into how the internal accounting system can contribute towards the organization.
Objectives & Characteristics of Internal Accounting System
Accounting as a discipline largely grew as an external accounting discipline wherein auditors and other firms provided the services to audit the accounts. (Schwarz, 2000). However, as the organizations grew as more complex entities and competition started, it became critical that the organizations must also develop their own internal accounting system in order to track all the expenses as well as the movement of assets to better control and make more timely and rational decisions.
Thus internal accounting system provides timely information regarding the movements in important accounting variables such as costs, profitability, liabilities etc. this invariably allow management to understand and know the organization in better manner and take timely decisions.
This is important for the organization as a whole because it allow better control over accounting matters and provides a systematic overview of how the organization is performing and what are some of the critical areas which need improvements.
It is also important to note that the managerial accountants, people who basically run the internal accounting departments have to comply with the business ethics and professional code of conducts. It becomes the responsibility of managerial accountants therefore to uphold the highest business ethics and comply with basic ethical foundations such as maintaining integrity and showing competences and confidentiality. (Hunter, 2010).
1. Hunter, R. (2010, May 30). Importance of Business Ethics in Managerial Accounting. Retrieved July 24, 2010, from brighthub.com: http://www.brighthub.com/office/finance/articles/72762.aspx
2. Schwarz, E. (2000, Feb 28). Purpose of Internal Accounting. Retrieved July 24, 2010, from Internalaccounting.com: http://www.internalaccounting.com/article10.htm