Accounting I Chapter 1 What is Accounting and Why Should you Learn it? Accounting Careers Communication and Business Ethics

Chapter 1 - Objectives What is Accounting and Why Should you Learn it? Accounting Careers Communication and Business Ethics

What is Accounting? Planning, recording, analyzing, and interpreting financial information. (It’s all about the $$$.) The planned process for providing useful financial information is called an accounting system. The organized summaries of the financial records of a business are called accounting records. “The language of business” page 5 of your text

Why is Accounting Important (or, why should you learn it?) What do Uma Thurman, Ben Stiller, Billy Joel, Johnny Damon, and John Elway have in common?

Celebrities who lost money to financial advisors instant&ion=1&espv=2&ie=UTF- 8#q=celebrities+who+lost+money+to+financial+advisor s

Who is this man? His name is Bernie Madoff. He stole $20 million and covered it up with false financial records.

People who lost money to Madoff include: Steven Spielberg, John Malkovich, Kevin Bacon, and his wife, Kyra Sedgwick

Would these people have lost their money if they understood accounting? We can’t know that – BUT the more you know about your money, the more likely you are to hang on to it. Accounting is important no matter what career you want -- if you want to work for a large corporation, a non-profit, or even the government – they all have accounting systems and you need to understand financial reports and information. If you want to start your own business, understanding accounting is essential.

Accounting Careers An accountant is someone who plans, summarizes, analyzes, and interprets accounting and financial information Accounting firms provide audit, consulting, and tax management services Forensic accounting – investigative / white collar crimes Certified Public Accountants – “CPA” – in Michigan – must pass exam, work in public accounting for 2 years. Other Careers

Public v. Private 1. Public accountants / public accounting firms – the “Big 4” Provide accounting services to the public 2. Private accountants Employed by / provide services to only one business

How much do accountants earn? e-instant&ion=1&espv=2&ie=UTF- 8#q=how%20much%20do%20accountants%20mak e

Communication Accounting records can provide you with accurate information regarding financial activities To use this information, managers and accountants must be able to communicate it to others, even if others do not have accounting knowledge. Communication skills are very important

Ethics Making the right decisions – principles that guide you Business ethics guide you in making business decisions. Factors that can lead to unethical decisions: (1) too much emphasis on profits, (2) misplaced loyalty, (3) personal advancement, (4) expectation of not getting caught, (5) unethical business environment, and (6) unwillingness to take a stand pages of text

Actions will or may be unethical if: an action violates international, federal, state, or local laws an action violates company rules or standards OR professional standards. the action adversely affects customers, employees, the company, the community, or others pages End of Chapter 1