财务英语　全套讲义.doc

LESSON ONE ACCOUNTING: AN INFORMATION SYSTEM Accounting is an information system necessitated by the great complexity of modern business. One of the most important functions of accounting is to accumulate and report financial information that shows an organization’s financial position and the results of its operations to its interested users. These users include managers, stockholders, banks and other creditors, governmental agencies, investment advisors, and the general public. For example, stockholders must have an organization’s financial information in order to measure its management’s performance and to evaluate their own holdings. Banks and other creditors must consider the financial strength of a business before permitting it to borrow funds. Potential investors need financial data in order to compare prospective investments. Also, many laws require that extensive financial information be reported to the various levels of government. Businesses usually publish such reports at least annually. To meet the needs of the external users, a framework of accounting standards, principles and procedures known as “generally accepted accounting principles” have been developed to insure the relevance and reliability of the accounting information contained in these external financial reports. The subdivision of the accounting process that produces these external reports is referred to as financial accounting. Another important function of accounting is to provide the management inside an organization with the accounting information needed in the organization’s internal decision-marking, which relates to planning, control, and evaluation within an organization. For example, budgets are prepared under the directions of a company’s controller on an annual basis and express the desires and goals of the company’s management. A performance report is supplied to help a manager focus his attention on problems or opportunities that might otherwise go unnoticed. Furthermore,