Executive Summary
By looking at the calculation result from Appendix, we are aware that the efficiency variances for material, labour and variable overhead, the labour price variance and spending variance for variable and fixed overhead turn out to be unfavourable and favourable. These results can be used to evaluate the Jigsaw department, and give the performance evaluation of Jason Cheng (department’s manager), Thomas Licuria (purchasing manager), Christine Tarrant (production manager). It is followed by detailed explanation of approaches specified in the development of the standard costing system; variance analysis, performance evaluation and reward system respectively, and the proper recommendations to improve those three areas.
Introduction
Strattenberg Toys that a privately owned company in the manufacture of toys, puzzles, games and jigsaws has been operating for over 20 years. Each department is responsible for production, distribution and customer service related to its products. Research and Development, Product and Process Design and Marketing are undertaken centrally. The company had a great reputation in their industry. The Jigsaws Department began operations in March 2002 and has finished its first full financial year of operations. Read more…
Over the years business has crossed boundaries, spanned over land and ocean, and generally changed the world. As business continues to evolve more broadly on a worldwide level, an introduction of new products, new jobs, and new ways of operating in the business world has occurred. This evolution does not occur without certain complexities developing, which then fuels a search for more effective ways to be successful worldwide. A major impact is in the accounting policies and methods used by companies operating international subsidiaries. Through a better understanding of international accounting and its affect on a company headquartered in two different countries, these troublesome issues with respect to becoming successful worldwide becomes clear.
Accounting encounters more challenges when entering the international arena. Foreign subsidiaries introduce issues of translation, transaction, and exchange rates. Through exploration of the Federal Accounting Standard 52: Foreign Currency Translation, a better understanding of these three issues becomes apparent. Translation deals with taking one currency such as the U.S. dollar, and translating it into another currency such as the British Pound, for reporting purposes. This represents one of the main difficulties in international accounting - preparing consolidated financial statements when a company has foreign subsidiaries that are included. FAS 52 explains foreign currency translation as, “The process of expressing in the reporting currency of the enterprise those amounts that are denominated or measured in a different currency” (FAS, Appendix E). Read more…
Positive accounting theory (PAT) is a general term for any theory that provides descriptive information regarding the behavior of accountants. The title has been used by Watts and Zimmerman and this is largely an expansion of previous studies carried out firstly by Fama and later by Ball & Brown in the 1960’s. In looking at the apparent acceptance by politicians, firms and wide publication in academic journals PAT could easily be mistaken as being a success. A deeper analysis of the premises of PAT, its questionable scientific status, and the groups upon whom this theory has appealed to would suggest that it is flawed on many levels and is little more than an argument for deregulation and market capitalism. This opposes its claim to be a useful theory used regularly by those concerned with the effects of accounting policy on the status of the firm.
The Premises of Positive Accounting Theory
Positive Accounting Theory finds its roots with the Efficient Market Hypothesis (EMH). The EMH was developed by Fama in the 1960’s and is based on economic principles and assumes a perfect market where there is information symmetry and no transaction costs. The semi strong form of EMH argues that capital markets will reflect all information that is publicly available and it is this form that Watts and Zimmerman claim to be predominant. Read more…
“You can’t do business globally and use provincial accounting standards.” This quote from a member of a German bank’s Managing Board reflects the concerns being expressed by institutions from many countries that are united in the IASC (International Accounting Standards Committee). In a world of global enterprises and global capital markets, where people can access the information they need anywhere in the world online and on time, the biggest problem is a lack of transparency and comparability of information. The main objective of International Accounting Standards (IASs) is therefore to provide a global standard for drawing up annual financial statements in line with the general aims mentioned above.
In addition to the international focus of these standards, they aim to ensure that investors can compare data extensively by reporting period and company and thus obtain a sound basis on which to make their decisions. This is why the basic principle behind the IASs is that of providing a true and fair view and of fair
presentation. Read more…
A good Accounting dissertation requires the right topic. One of the complaints most often heard about accounting dissertations is in developing an Accounting topic that can be used when there is often limited information about financials for the paper.
Here are some ideas, first, some organizations will work with you to assist you in completing your Accounting dissertation if you speak with them and agree to keep the company name and information confidential – in this way you will develop the dissertation using a fictitious organizational name, location, and possibly even change the industry. Organizations work with college students particularly when they have found a problem they may want solved and do not have anyone available to work on the problem. In this way, the organization may provide the problem statement for you – this can be anything from developing new methods for reporting organizational accounting information to reviewing how the organization can better manage operational expenses. Read more…
The central focus of this essay will be on the legal principle of pre-registration contracts. As the definition of pre-registration contracts ( in legal terms) suggests, they are the kind of contracts that are intentionally entered into, on the behalf of a company that is not yet registered. In pre-registration contracts, a person that enters into an agreement on the behalf of an unincorporated company, is known as a promoter. A promoter is the person who intends to or will generate profit from the formation or the financing as a company. This means that if a pre-registered company enters into a contract, the promoter is entitled to the benefits and incur personal liability from that contract. Therefore, this has led to the introduction of Section 131 of the corporations act. This provides a different and modern view of pre-registration contracts compared to its common law definition. Accordingly, this will lead to a discussion of the common law view of pre-registration contracts and the definition that is provided by Section 131. A large emphasis will also be placed on the role of promoters and companies as well as third parties that are involved in this particular area of law. Pre-registration contracts are now highly uncommon, due to the consequences involved, as this essay will reveal. Read more…
From the beginning of a child’s life parents always dream of what their kids will grow up and be. Every parent’s dream is for their kid to be very successful and make a good living. Many parents dream of their kids being very rich. Lawyers and accountants make the money parents dream of their kids making. A lawyer as well as an accountant make the big bucks everyone dreams of making. These are two great careers one should explore when thinking about a lifetime job. These two careers are both good choices, but they have their differences. Among these differences are their salaries, education requirements, and skill requirements.
Lawyers and accountants both make great money, but their income can differ. The amount of money one earns depends on several factors. Most accountants coming out of college with a bachelor’s degree earn between $23,000 and $35,000 a year. Senior accounts can earn up to $50,000 a year. Owners and partners of firm can earn $100,000+ a year. These opportunities are rare, but can be reached. An accountant with a major earns considerably more than one with just a bachelor’s degree. Read more…
In a competitive market a modern business has to know about what is going in and what is going out, without this a business is useless. All businesses, whatever their size, need to keep accurate records – particularly about money. The owners want to know what is happening and they have a legal duty to prove that the business is properly run. Businesses need to be constantly aware of the condition of their finances, so that they can try to make adjustments where necessary to keep afloat. Within this essay the various benefits of accounts are described in relation to a modern business.
Initially one of the key points of keeping track of a company’s’ accounts is to find out if you are making profit. Therefore, by assessing the income and expenditure aspects of the accounts, profit can be calculated and this should help you to analyse your business progress, by comparing with previous years accounts.
Accounting can also highlight individual areas of your business so that you can discover what the successful and unsuccessful areas of your business are. These can then be rectified to improve profits.
Read more…
Many corporations judge the health of their finances based solely on the bottom-line. However, as one article shows, there is more to a company’s financial health than the final net profit. According to Joseph T. Wells, in his article “control cash-register thievery: show your clients the importance of looking above the bottom-line,” fraud does not always show up on balance sheets. This article was published in the June, 2002 issue of the Journal of Accountancy.
In this article, Wells discusses the problems a particular client had when it was found that there were suspicious return receipts on certain products. This was definite trouble for the company, which was named Discount Department Stores (most likely and assumed name in order to protect the real company that underwent this problem).
The first tip came when the company’s internal auditor spotted sales for funds of exacting amounts — 3 and are dollars — $400 and so on. Knowing that refunds do not typically come in exact hybrid-dollar increments, the auditor worked with Wells, who headed up a fraud squad at the time. As Wells question the auditor, he learned that Discount’s methods of financial accounting involved checking net sales and confirming that amount in the bank, rather than performing a horizontal analysis of income statements to determine if refunds were increasing as compared to sales. Read more…
