Social science dictionary
Federal financial managers are confronted with increasing demand to implement improvements in financial management practices to further enhance service to the public. One of the ways to keep accounting standards fair globally is by the International Accounting Standards Committee (IASC). The IASC was established to formulate and publish international accounting standards and to promote their acceptance worldwide; these standards are not universally applied.
Enron and similar scandals have opened the eyes of investors, government officials and corporate leaders. Investors and corporate leaders are justifiably concerned with the way organization accountant’s, auditors and financial advisors have misused invested funds and the global effects these improprieties have had. Federal organizations have set new rules concerning internal controls, including the 2004 revisions of the Office of Management and Budget Circular A-123.
These rules are holding auditors and accountants responsible for the unfair actions that take place in the misuse of invested money. Congress has felt the needed to tighten the hands of management because of the Federal Managers’ Financial Integrity Act of 1982 (FMFIA). With improved control this will help the quality of financial data. Financial accounting is accounting that will be used primarily in any external or public disclosure. These reports can be used to show growth and growth potential as well as to help identify any devious intent.
Management accounting will amass financial data that will be kept internal to the business organization. Primarily the management and leadership team in the management of day-to-day and month-to-month operations of the organization will use this information. Accounting is a much-needed facet of every business. Applying and adhering to the terms of the generally accepted accounting principals along with an ethical approach to data management, will help keep a business healthy and investors happy.
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