Assignment Instructions Write a 1,000 - 1,250 word paperon the following topic:...

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Assignment Instructions Write a 1,000 - 1,250 word paper on the following topic:...

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Assignment Instructions

Write a 1,000 - 1,250 word paperon the following topic:

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Describe the role of financial accounting in contemporary business. Provide one specific, real-life example of how financial accounting helps external stakeholders make informed decisions. Also, describe the role Generally Accepted Accounting Principles (GAAP) and the Financial Accounting Standards Board (FASB) plays in financial reporting in the United States.

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Your paper must be formatted according to APA 6th edition guidelines, and you need to use at least three external references.

Answered Same Day Dec 26, 2021

Robert · Accepted Answer

Student Name
Financial accounting is very important to any business as it helps in putting a perspective 
to whole scheme of things which any business is considering. Businesses are conducted to earn 
profit (not considering non-profit organizations) and hence a perspective towards the same can 
be very helpful. It is very important that one can gauge certain numbers and take a call on the 
success or failure of the business. The financial accounting helps in keeping a check on things 
which are happening in the business; it is a like a mirror which an organization need to visit from 
time to time so that things are in check (AASB 138, 2017).  
Business executives and middle managers need broadly adopted and consistently applied 
measures of value to make informed decisions. This is natural. We communicate by using 
concepts that have common meaning. As the issues we deal with become more complex, the 
common concepts we use to communicate should extend to allow greater precision and clearer 
meaning. For decades, the broadly adopted and consistently applied measures of business value 
have been the traditional accounting measures such as net profit, earnings per share and return on 
invested capital.  
There are two reasons for this dominance of accounting metrics in reporting and measuring 
business performance: 
 Markets still place a high degree of emphasis on the achievement of quarterly financial 
targets, primarily revenue, net profit and earnings per share. 
 The "numbers" are the only common language for reporting business performance in a 
company with diversified operations, because there are no standard definitions of non-
accounting metrics, and no way of relating these to the overall impact on business 
performance. The only way executives can judge the relative performance of different 
parts of their business on a comparable basis is by using accounting metrics. 
Yet, despite the importance of accounting metrics, they are only part of the picture when 
it comes to understanding business performance. Since 1980, these traditional accounting 
measures of value have not kept pace with actual value as measured by our capital markets. 
Consequently, the predominance of accounting metrics does not enable businesses to understand 
and measure how value is created in their organizations.

Assignment Instructions Write a 1,000 - 1,250 word paper on the following topic:...

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