Question

Explain why organisations have policies regarding the use of assets and why do staff need to be aware of them and other organisational policies, procedures and accounting standards.

Answer 1

Followings are the policies regarding use of assets and its reasons:-

• Intellectual policy- It’s about how the organization is able to protect their non-tangible assets like: patents, copyrights and goodwill. All the information related to these activities should remain confidential and highly restricted.

• Financial product policy- Financial assets like- debit card, credit card and other products must be protected by highly advanced technologies. So that client’s personal data cannot be misutilized.

• Safe guarding financial securities- Trading value of financial securities like- equity, debentures and other assets must be lies with investors only. As a result the company will be able to avoid insider trading and unprecedented loses.

• Transaction policy- Cash transactions and cheque payments must be recorded properly to evaluate sales of company assets in past periods. It will avoid any mismatch in reconciliation.

Followings are the reasons behind staff awareness about organizational policies, procedures and accounting standards:-

• “Whistle blowing policy” will encourage staffs to raise their voice against corruption and unethical business practices in the organization. So that investors should not lose their hope in long run.

• Information about “Accounting Standards” like- GAAP & IFRS principles will help the employees to maintain transparency and consistency in financial transactions. So that the foreign institutional investors will be able to access company’s financial statements properly before making any investment decisions.

• Other organizational policies like- “code of conduct”, “risk & compliance” will help the employees to make an effective utilization of financial resources. Financial crime will be prohibited through these policies.

• Knowledge about FASB & IFRS will help to prepare error-free financial reports. Hence accuracy in financial information is maintained.