Financial Accounting

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INTRODUCTION
Accounting is the process of identifying, recording, summarizing, and reporting economic information for decision makers.
Financial Accounting is the process of producing information for external use usually in the form of financial statements. Financial Statements reflect an entity's past performance and current position based on a set of standards and guidelines known as GAAP (Generally Accepted Accounting Principles).
Accounting Ethics is the potential and possibilities for abuse of information or manipulation of numbers to enhance company perceptions or enforce earnings management.
The followings are the environment that financial accounting operates:-
            Management, produces information primarily for internal use by the company's management. The information produced is generally more detailed than that produced for external use to enable effective organization control and the fulfillment of the strategic aims and objectives of the entity. Information may be in the form budgets and forecasts, enabling an enterprise to plan effectively for its future or may include an assessment based on its past performance and results.
            Governmental,refers to the type of accounting information system used in the public sector. This is a slight deviation from the financial accounting system used in the private sector. Government defines and monitors accounting thresholds such as sales revenue and net profit to determine the size of each business for the purpose of ensuring that it complies with the relevant employee, consumer and safety regulations.
            Tax Authorities, refers to accounting for the tax related matters. It is governed by the tax rules prescribed by the tax laws of a jurisdiction. Often these rules are different from the rules that govern the preparation of financial statements for public use. Tax authorities also cross reference accounting information of suppliers and consumers in order to identify potential tax evaders.
            Forensic, is the use of accounting, auditing and investigative techniques in cases of litigation or disputes. Forensic accountants act as expert witnesses in courts of law in civil and criminal disputes that require an assessment of the financial effects of a loss or the detection of a financial fraud.
            Project,to the use of accounting system to track the financial progress of a project through frequent financial reports. Project accounting is a vital component of project management. It is a specialized branch of management accounting with a prime focus on ensuring the financial success of company projects such as the launch of a new product.
            Social Environment, also known as Corporate Social Responsibility Reporting and Sustainability Accounting, refers to the process of reporting implications of an organization's activities on its ecological and social environment. Social Accounting is primarily reported in the form of Environmental Reports accompanying the annual reports of companies.
The following are the Ethical Standards applied by professional Accountant
·         Integrity, a professional accountant should be straight forward and honest in all professional and business relationships ethics
·         Objectivity,  a professional accountant should not allow bias conflicts of interest or undue influence of other to override professional or business judgment
·         Professional competence due care,  a professional accountant duty maintain professional knowledge and skills at level required to ensure that a client or employer receive competence professional services based on current development in practice legislation and techniques’ professional accountant should be act diligently and in accordance with applicable technical and professional standards when providing professional services.
·         Confidentiality, a professional accountant should respect the confidentiality of information required as a results of professional and business relationship and should be not disclose any such information to third part parties without proper and specific authority unless there legal or professional right or duty to disclose. Confidential information acquired as results of professional and business relationship should not be used for the personal advantage of the professional accountant or third parties.
·         Professional behavior, a professional accountant should comply with relevant laws and regulation and should avoid any action that discredits the professional each of these fundamental principles
Benefits of Accounting Standards
Accounting Standards are the ruling authority in the world of accounting. It makes sure that the information provided to potential investors is not misleading in any way. Let us take a look at the benefits Accounting Standards;
Attains Uniformity in Accounting, provides rules for standard treatment and recording of transactions. They even have a standard format for financial statements. These are steps in achieving uniformity in accounting methods.
Improves Reliability of Financial Statements, there are many stakeholders of a company and they rely on the financial statements for their information. Many of these stakeholders base their decisions on the data provided by these financial statements.
Prevents Frauds and Accounting Manipulations, lay down the accounting principles and methodologies that all entities must follow. One outcome of this is that the management of an entity cannot manipulate with financial data. Following these standards is not optional, it is compulsory.
Assists Auditors, Now the accounting standards lay down all the accounting policies, rules, regulations, etc. in a written format. These policies have to be followed. So if an auditor checks that the policies have been correctly followed he can be assured that the financial statements are true and fair.
            Comparability, since all entities of the country follow the same set of standards their financial accounts become comparable to some extent. The users of the financial statements can analyze and compare the financial performances of various companies before taking any decisions.
            Determining Managerial Accountability, help measure the performance of the management of an entity. It can help measure the management’s ability to increase profitability, maintain the solvency of the firm, and other such important financial duties of the management.



CONCLUSION
Generally, mostly of the above are important to know the prospective Accountant but in case for any damage happen must be responsible, in other side the effect to unknowns ethical are to be included as nonprofessional accountant.





REFERENCES
Frank Wood and Sanster A.: Business Accounting (2005) 10th Ed: Ft/Prentis Hall
R. Narayanaswamy Financial Accounting – A Managerial Prospective; PHI Learning Pvt. Ltd
P. C. TulsianFinancial Accounting, Sultan Chand & Company, New Delhi.
Ashish K. Bhattacharyya Essentials of Financial Accounting; PHI Learning Pvt. Ltd.
Kothar, Jagdish, Barone, Elisabelt, (2006). Financial Accounting: An International Approach: Prentice Hall.

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