Question

Research is conducted to resolve problem and find solutions. In accounting, research can be conducted in several areas to solve several accounting issues. Considering each and every areas of accounting you need to highlight the keys problems which may arise in each area and how would solve those problem.

a)      Discuss the problem which may arise in accounting information system

b)      What problem may arise in management accounting area?

c)      Identify the problem which may be arising in financial accounting?   

d) How would you give solutions to the above mentioned problem?

Answer 1

a) AIS (Accounting information System): Normally, this system is designed for businesses to use for recroding their financial transcations. under this information is entered, processed, stored and distributed through this system and take benefit from them. But many problem faced under this system which are as:

-All system are compterized so for some of employee feel hard to use is one major issue.

-There must be training required for the employee to understand this system, this require lot of money spend and time involved.

-Loss of information is one of the major issues.

-From time to time Re-evaluation is necesssary for updation process with the latest trends.

-Under this lot of data is kept for many years but loss of data create many problem and recover the things involved money and time and also management crucial decision also affected.

b) MAA (Management Accounting Area): Management Accounting can help the business in various way to improve, efficient and effectively to utilise resources with strategic objective.

Management accounnting is the process of providing finanacial information and resources to the manager in decision making but this is also not free from limitations.

- Management has less knowledge in economics ,finance and statistics that creates major issues

- Management team receives historic data which may change from time to time

- Setting up off management accounting area require lot of investment which is expensive

- Management team takes dicision as per data provided by financial accountant which is serious limitation they face.

- It is used only for internal purpose of firm.

c) FA (Financial Accounting) There are typically three problem taht occurs when creating the financial statements are reporting error, disagrement in judgement and fraudulent financial reporting

- As trade becomes more and more global and complex , the financial acoounting industry faces lot of struggles

- Companies which operate in multiple countries also face major issues

- Most financial accounting rules are based on historical cost evaluation then, valuing assets and liabilities are difficult task beacause some assets are depreciated over the time.

- Companies taht have branches in variou countries face many challenges in reporting accurately as they must legally prepare financial statement

- Non financial measures is also one of the major issue , many of the benchmark are not of financial in nature but customer satisfaction and employment policies also in the way .

d) Solutions for AIS, MAA, FA , - As the problem discussed above in different areas of accounting there is also solution to ever problem :

- Companies which operate in multiple countries must analyse the legal matter of all the countries and report accordingly

- A management must need new technology every time and also update these technology with the employees from time to time to avoid any complication

- Implementation of real time accounting is necessary to upgrade business

- Management must be fast intaking decision , make proper planning ,timely understanding financial data to take the benefit.

- Management must identify business problem areas in advance to solve the matter before it becomes crucial.

-From time to time efforts is to take research on the areas which are week and trying to sort out as earlier as problem become risky.