ASSIGNMENT 1 FRONT SHEET

Qualification BTEC HND in Business

Unit number and title Unit 5: Accounting Principles (5038)

Submission date 22/10/2024 Date Received 1st submission 22/10/2024

Re-submission Date Date Received 2nd submission

Student Name Nguyen Minh Khoa Student ID BC00512

Class BA07201 Assessor name Mr. Thep

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I certify that the assignment submission is entirely my own work and I fully understand the consequences of plagiarism. I understand that
making a false declaration is a form of malpractice.

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Table of Contents
I. Introduction ..................................................................................................................................... 2
II. Main Contents ............................................................................................................................. 2
1. The role of accounting in an organization................................................................................... 2
1.1 Definition of Accounting and General Role of Accounting in an Organisation ..................... 2
1.2 Different types of accounting .................................................................................................. 2
1.3. Differences between financial accounting and management accounting................................ 3
1.4. Career Opportunities in Accounting ....................................................................................... 5
1.5 Fundamental principles of ethics in accounting ...................................................................... 6
1.6 Required skills and competencies for accounting roles .......................................................... 7
2. The importance of accounting as an information system. ............................................................... 9
2.1 Definition of Accounting Information System ....................................................................... 9
2.2 Roles and importance of accounting as an information system .............................................. 9
2.2 a Roles of accounting as an information system .................................................................... 9
2.2 b Importance of accounting information system .................................................................. 10
2.3 Quality of accounting information ........................................................................................ 11
2.4 The main users of accounting information............................................................................ 12
2.5 Interrelationships of accounting function and other functions .............................................. 14
2.6. Evaluate the role of accounting in providing the information to help the Manager in
decision-making to meet organizational, stakeholder and societal needs ......................................... 17
III. Conclusion ................................................................................................................................ 19
IV. References ................................................................................................................................. 19
I. Introduction
Accounting plays a very important role in businesses. Including small and medium
enterprises (SMEs). The task of accounting is not only to collect, process and analyze financial
data. It supports the management to make correct and reasonable decisions. Not only
supporting in decision making, accounting also helps to improve business transparency and
trust among stakeholders.
In this report, the author will analyze the general definition and role of accounting, the
skills required in accounting, the different types of accounting and the difference between
management accounting and financial accounting, career opportunities for accountants and the
basic ethical principles when becoming an accountant. In addition, the author also analyzes the
relationship between accounting and other departments, and how accounting supports
management in making decisions in a rapidly changing economic environment.
II. Main Contents
1. The role of accounting in an organization
1.1 Definition of Accounting and General Role of Accounting in an Organisation
Accounting is concerned with collecting, analyzing and communicating financial
information. The ultimate aim is to help those using this information to make more informed
decisions. Unless the financial information being communicated can improve the quality of
decisions that users make, there is really no point in producing it (McLaney and Artill, 2018).
The general role of accounting in an organization goes beyond just calculating figures; it
also involves recording, analyzing, interpreting, and communicating the financial information
of the organization over a business period. This recorded financial information is crucial for
the organization, as it conveys a wealth of information that owners, management, and investors
need to assess the company's financial performance. Accounting provides financial information
accurately and timely, allowing stakeholders to gain important insights that support better
business decision-making. Additionally, by recording and monitoring the performance of
financial information, accounting ensures compliance with legal requirements, contributing to
the establishment of credibility and enhancing the transparency of the organization, thereby
building trust among stakeholders.
1.2 Different types of accounting
- Tax accounting: Tax accounting is a field within accounting that focuses on taxes
rather than the appearance of other public financial statements, tax accounting is one of the
most common forms of accounting that helps businesses, individuals, and non-profit
organizations comply with the Tax Code. Tax Accounting is governed by the Internal Revenue
Code, and is applicable to everyone, including those who are exempt from paying taxes, must
participate in tax accounting (Kagan, 2019).
- Financial accounting: Financial accounting is a type of accounting commonly used
in business activities, it tracks, collects, processes and classifies the financial transactions of
the organization. Then it is prepared into financial statements. Financial statements include
three main types: income statement, cash flow statement and balance sheet.
Financial statements are widely used by external stakeholders such as creditors, investors
to support investment decisions in the organization. Therefore, accountants must ensure that
financial statements comply with the standards of Generally Accepted Accounting Principles
(GAAP) (Laurinavicius, 2023).
- Cost accounting: Cost accounting is a type of management accounting that focuses
on the cost structure of an organization. Cost accounting records product costs, project-related
costs, and business operating costs. Through cost accounting, management can determine
where and on what business activities the business is spending money (Laurinavicius, 2023).
- Forensic accounting: Forensic accounting is a type of accounting that use accounting,
auditing, and investigative methods to detect potential criminal activities such as fraud,
embezzlement, and tax evasion. Forensic accountants often work for insurance companies,
financial institutions, and law enforcement agencies.
Forensic accounting has two main aspects. The first is investigative, where a forensic
accountant can review and analyze relevant documents to uncover financial misconduct. The
second is litigation support, where a forensic accountant analyzes financial records and
accounts that can be used as legal evidence and often testifies in court as an expert witness
(Laurinavicius, 2023).
- Management accounting: Management accounting is a type of accounting that
involves collecting, and analyzing an organization's internal financial data, and then
communicating that financial information to management to assist them in making sound and
informed business decisions and setting long-term goals for the organization (University of the
Potomac, 2024).
In addition, there are other types of accounting such as international accounting,
governmental accounting and auditing.
1.3. Differences between financial accounting and management accounting
Table 1. Differences between financial accounting and management accounting
 Financial Accounting Management Accounting

Provide external stakeholders Provide detailed and

Purpose such as creditors, investors specific information to
with general information internal managers to support
about the financial situation decision making, planning
of the organization. With the and strategy for business
aim of accurately presenting operations.
the financial situation of the
organization
The scope of Financial The scope of managerial
Scope Accounting is broad and accounting is narrower and
general. Financial accounting more specific than financial
reports focus on the overall reporting. Managerial
financial performance and accounting focuses on
position of a company over a detailed information
given period of time. tailored for specific internal
purposes.
Regular financial reports are Management reports are
Report Interval prepared on an annual, semi- generated more frequently,
annual, or quarterly basis as required by management.
depending on the needs of the These reports can be
organization. generated daily, weekly or
monthly to support decision
making and business
management.
Financial statements are Management accountants
Regulations subject to accounting are not bound by specific
regulations imposed by law legal regulations or
and accounting standards. accounting standards.
Management accounting
reports can be flexibly
designed to meet the
 internal needs of the
business.

1.4. Career Opportunities in Accounting

Accounting plays an important role in managing and controlling financial activities to
ensure transparency and compliance with legal regulations in organizations. Therefore, career
opportunities in the field of accounting are very diverse, as all organizations operating in many
different fields need an accounting department to collect and analyze financial information,
thereby providing stakeholders with an understanding of the financial situation of the
organization. Along with the development of the economy, many businesses are established,
leading to an increase in the demand for accounting personnel.
According to some surveys in 2023, the recruitment demand of the accounting industry
will continue to grow in the next 10 years. With a growth rate of about 10%, the recruitment
demand of the accounting industry is even higher than some other industries.
For every business, accounting is almost an indispensable part to monitor and control the
budget sources of the business to maintain the business's operations. In the context of today's
developing society, accountants can choose to work in state agencies or in businesses.
However, accountants often choose to work in private businesses in many different fields
because of good promotion paths and attractive benefits (IABM, no date).
- Chief Accountant: The chief accountant is the head of the accounting department,
they are responsible for operating and orienting the financial plans for the business. In large
enterprises, chief accountants are the ones who work and report to the CFO, they are
responsible for orienting and advising the board of directors in making decisions, business
strategies and reporting the economic situation of the enterprise. Chief accountants are often
accountants with a lot of experience before being promoted to the role of chief accountant, this
helps them have a deep understanding of how the accounting department in the enterprise
operates (Pace, no date).
- Financial analysts are people who provide informed guidance to businesses or
investors on important business investment decisions, by analyzing financial data for market
trends. Financial analysts can work in banks, investment firms, or in businesses.
 In addition, not only in businesses but also in accounting opportunities at auditing firms
are extremely diverse and have high development potential. With the development of the
economy, accounting services of auditing firms are forecast to increase sharply, leading to an
increase in demand for human resources. According to a study by Arizent, a financial
consulting firm, in 2024, up to 54% of auditing and accounting firms are expected to recruit
new employees, opening up huge career opportunities (State audit office of Vietnam, 2024).
Besides, the opportunity to work at 4 accounting firms Deloitte, Ernst & Young, KPMG and
PwC can bring a lot of experience and open up huge promotion opportunities. Job positions at
auditing and accounting firms such as:
- Auditors are authorized to review and verify the accuracy of a business's financial
records and ensure that businesses comply with legal regulations and tax laws. They protect
businesses from fraud, point out discrepancies in accounting methods, and work on a consulting
basis to help organizations increase operational efficiency (Liberto, 2022).
- Audit assistants are people who provide technical and administrative support to the
principal auditor or chief auditor to help examine a company's financial information or
processes. The audit assistant's job is to plan and perform aspects of an internal audit to improve
the company's financial performance (ZipRecruiter, 2024).
In addition, career opportunities in the field of accounting are not limited to businesses and
banks but also extend to other areas such as education, where accounting plays a vital role.
Specifically, the role of accounting lecturers at universities and colleges is crucial; audit
instructors not only teach students about accounting and auditing principles but also impart
essential practical skills for them to apply in real-world work environments. They play a
significant role in developing curricula, guiding students in conducting research, and
overseeing auditing projects. Moreover, non-profit organizations and government agencies
also require accounting-related positions, such as fund management specialists and government
accountants, to prepare financial reports and ensure that finances are used correctly for social
and community objectives.
1.5 Fundamental principles of ethics in accounting
- Intergrity: Integrity is one of the basic ethical principles of accountants. Integrity is
understood as honesty, always respecting the truth, and ethical standards. Simply put, integrity
is doing the right thing even when no one is watching or instructing (Binh Nguyen, 2018).
Integrity is the basic ethical principle of every accountant, accountants are primarily
responsible for collecting and reporting financial data for the organization. This financial data
is extremely important to the organization, because it helps the management to accurately
assess the business performance of the organization. And it requires accountants to record it
accurately. Without integrity, accountants can distort or provide false information, affecting
the entire organization. In addition, accountants and professional auditors must be
straightforward and honest in all professional and business relationships to maintain the
transparency of the organization.
- Professional competence and due care: : Professional competence refers to the
knowledge and skills that an accountant must possess in order to perform his or her job
effectively. A professional accountant must continually develop and update his or her
knowledge of new developments in his or her field, including changes in accounting standards,
tax regulations, and other relevant laws. Failure to keep up with these developments can result
in inaccurate financial statements, which can have serious consequences for clients.
Meanwhile, due diligence refers to the diligence and care that an accountant must exercise in
his or her duties. Failure to exercise due diligence can result in errors in work processes such
as financial reporting or data collection that can have a major impact on the organization.
In addition, from the client’s perspective, they expect accountants to be competent and
diligent in their work. Clients depend on their accountants to provide accurate financial
information that they can use to make informed decisions. If an accountant is not competent
and diligent in their work, they may provide inaccurate financial information to their clients,
which can not only lead to financial losses but also legal issues (Fastercapital, no date).
In addition, ethical principles in accounting also include professional behaviour,
confidentiality, objectivity.
1.6 Required skills and competencies for accounting roles
In the field of accounting, essential skills and expertise not only help accountants perform
their tasks effectively but also play a crucial role in providing necessary information to the
organization and ensuring the transparency and accuracy of financial data. Skills such as data
analysis, time management, and communication are extremely important for accountants.
- Data Analysis Skills: Data analysis skills are a particularly important skill in
business, data analysis skills include collecting, analyzing and processing financial data such
as revenue, profit, and costs into valuable financial information for the business. The reason
data analysis skills are a particularly important skill is because the nature of accounting work
is mainly working with financial data to understand the financial situation of the company.
Moreover, financial data is the most important asset for every business, because it supports the
management in making accurate business decisions, which is why data analysis skills are an
indispensable skill for accountants (Ottawa, 2021).
 For example, data analysis skills are used by accountants in analyzing the business
situation of the business, by analyzing the revenue and operating costs of the business. Using
effective data analysis skills will help accountants easily grasp the business situation of the
enterprise, whether it is going smoothly or complicatedly. At this time, accountants can make
recommendations to the management to cut some unnecessary costs to improve performance.
In addition, during the financial reporting stage, accountants also need to use data analysis
skills to present financial information in an easy-to-understand and systematic way. This helps
the management to easily grasp the business situation and make reasonable decisions based on
reliable information.
- Time management skills: Time management is the process of planning to control the
time spent on one or several specific activities with the aim of increasing efficiency,
effectiveness, and productivity. Simply put, time management is the skill of dividing work and
arranging work reasonably to improve labor productivity (Cloud Office, no date). Time
management skills are an important skill for every accountant. As we know, in the stages of
financial reporting of enterprises approaching, the work of accountants becomes very busy,
because they need to collect, process and report to the board of directors within a certain period
of time. They need to ensure that data is collected and presented on time for submission to
management agencies and stakeholders. Failure to submit financial reports on time can affect
the reputation and transparency of the enterprise. Therefore, time management skills are not
only the key for accountants to complete their work on time but also improve their work
productivity.
Moreover, at the beginning of the year, known as the "tax season," the workload for
accountants increases significantly. As they need to manage multiple spreadsheets, clients, and
reports, effective time management skills will assist them in completing reports and submitting
taxes on time (Gallagher and Beagle, 2024).
- Communication Skills: Communication skills refer to the ability to express thoughts
and present opinions clearly and persuasively through spoken language or body language
(Talet, no date). In the field of accounting, communication occurs frequently, countering the
stereotype that accountants primarily work on computers with limited interaction. However,
accounting requires accountants to have strong communication skills. These skills are applied
in most aspects of an accountant's job; for instance, when accountants work with clients and
stakeholders, they need to explain accounting terms in a manner that is easy to understand.
Additionally, when collecting information and clarifying unusual discrepancies in accounting
records, communication skills enable them to gather necessary information effectively by
asking the right questions (Gallagher and Beagle, 2024).
Additionally, this skill is also applied when explaining financial reports. A primary
responsibility of accountants is to provide financial information, which means they often need
to present and analyze specific figures. They may even propose strategies for management or
the executive team based on their analysis.
In addition to the skills mentioned above, accountants also require other skills such as
critical thinking, problem-solving, and computer proficiency. Critical thinking allows
accountants to evaluate complex financial data and make informed decisions, while problem-
solving skills enable them to address and resolve discrepancies in financial reports or
transactions effectively. Proficiency in computer software and technology is essential, as
accountants often utilize various accounting software and tools to streamline their processes
and ensure accurate financial reporting (Gallagher and Beagle, 2024).
2. The importance of accounting as an information system.
2.1 Definition of Accounting Information System
An Accounting Information System is a structured system that involves the capturing,
recording, and analysis of financial information and accounting. It is used primarily by internal
users, such as management and accountants, to generate reports and communicate financial
information to external stakeholders, including investors, regulators, and creditors (McLaney
and Artill, 2018).

Figure. The accounting information system

Source: McLaney and Artill, 2018
2.2 Roles and importance of accounting as an information system
The Accounting Information System (AIS) plays a pivotal role in ensuring that financial
data is accurately captured, processed, and reported. Understanding the roles and importance
of accounting as an information system is crucial for organizations seeking to achieve
transparency, compliance, and sustainable growth.
2.2 a Roles of accounting as an information system
- Data Collection and Processing: Data collection and processing are essential roles
of an accounting information system (AIS) in ensuring the efficient operation of any
organization. In this phase, the AIS is responsible for gathering financial data from daily
business transactions, such as sales and cash purchases, accounts receivable, accounts payable,
and employee payroll expenses. This information is accurately and systematically recorded to
form a complete picture of the organization's financial activities. After collection, the AIS
classifies the data into appropriate categories and processes it. This processing transforms raw
data into meaningful financial information, which aids in the preparation of financial reports
like cash flow statements, balance sheets, and income statements, and provides useful insights
for managers to make accurate decisions (Faisal, 2022).
- Reporting: The accounting information system (AIS) plays a crucial role in providing
transparent and accurate financial information to stakeholders. AIS generates various financial
reports such as balance sheets, cash flow statements, and income statements, which are vital
for both internal and external stakeholders to understand the organization’s financial position.
Timely delivery of financial reports allows managers, such as sales directors, production
managers, and analysts, to assess the financial performance and current standing of the
organization, aiding them in making informed business decisions for the future. Moreover, the
reporting function of AIS ensures that the organization complies with legal requirements,
helping to minimize legal and financial risks (Faisal, 2022).
- Connecting Multiple Departments: In addition to its role in collecting, processing,
and reporting financial information, the accounting information system (AIS) serves to connect
various departments within an organization, ensuring accuracy and consistency in financial
data across all departments. First, AIS gathers financial data from different departments, such
as sales, human resources, and production, and compiles them into comprehensive financial
reports. For example, it collects revenue data from the sales department and payroll expenses
from human resources.
Secondly, AIS can create a unified dashboard that links related departments, facilitating
the exchange and sharing of financial data. This enhanced connectivity enables better
collaboration and ensures transparency and consistency, thereby minimizing risks and conflicts
between departments. For example, the sales department can share revenue information with
the accounting department, which, in turn, can provide insights to other departments to help
design and adjust their operational strategies (Faisal, 2022).
2.2 b Importance of accounting information system
- Improving Decision-Making: As discussed earlier, the accounting information
system (AIS) plays a vital role in collecting and processing financial data, then providing key
financial information through accurate financial reports to management. Through reports such
as income statements, cash flow statements, and balance sheets, AIS enables management to
assess the organization's operational performance and make well-informed decisions
accordingly. Additionally, by gathering financial data from various departments, AIS helps
managers forecast market trends and plan for future growth. This allows them to make
informed decisions about improving, investing in high-potential products, or cutting
underperforming products. For example, management can track customer demand through
sales revenue reports shared by the sales department via the organization’s AIS, enabling them
to adjust strategies based on real-time financial insights.
- Ensuring Accuracy and Security: Accounting information systems (AIS) use
specialized software to automate the calculation and recording of data. Therefore, common
errors in manual accounting such as double-entry of transactions into the journal and errors in
calculation are resolved. In addition, this system has the ability to classify and process data
with high accuracy, helping to minimize confusion and create more trust than manual
accounting. In addition, accounting information systems ensure high security, while the
inherent risk of manual accounting makes documents susceptible to loss or theft, accounting
information systems provide a safe and secure document repository with complex security
layers. Therefore, unauthorized access to information has been significantly eliminated. In
addition, with an accounting information system, authorized users can also access information
at any time, and users can also access financial data remotely even while on a business trip or
vacation.
2.3 Quality of accounting information
In the current business context, accounting information plays a crucial role in decision-
making and strategy formulation. The quality of accounting information not only ensures
transparency in financial operations but also serves as a foundation for building trust with
investors, customers, and other stakeholders. High-quality financial information, which
adheres to established standards, provides a reliable basis for making better decisions.
- Relevance: Relevance refers to the usefulness of information for the financial
decision-making process. Relevant accounting information helps managers, investors or other
parties understand the financial position, performance and potential risks or opportunities of
the organization. For accounting information to be relevant, it must have:
+ Confirmatory value – Providing information about past events.
+ Predictive value – Providing predictive power regarding possible future events.
Therefore, information is considered relevant if it has the potential to influence the
decisions of users by helping them evaluate past, present and future events, it can provide useful
information about past events and help predict future events or take action to address possible
future events (CFI Team, 2022).
- Timeliness: Timeliness refers to how quickly accounting information is available to
its users. It is a critical factor in ensuring that information is provided at the right time to
influence users' decision-making processes. Timely accounting information enables managers,
investors, and other stakeholders to understand a company's current financial status and make
appropriate decisions based on the available data.
The value of accounting information diminishes as it becomes less timely (i.e., outdated),
making it less effective for decision-making. Timeliness is particularly crucial because
accounting information competes with other sources of information. For example, if a company
issues its financial reports a year after the accounting period, it would be difficult for users to
assess the company's present performance (CFI Team, 2022).
- Understandability: In accounting information is a crucial factor ensuring that users
can easily grasp and analyze financial data without needing deep accounting expertise. By
making financial information more comprehensible, it enhances its quality, as investors,
managers, and other stakeholders can better understand the organization’s performance and
utilize the information to make informed decisions.
In today’s society, annual reports often exceed 100 pages, including substantial qualitative
data. Therefore, making financial reports understandable for average users is essential.
Additionally, companies with poor performance often use complex jargon and unclear
language in their reports to obscure their weak results. Thus, clear and understandable
information fosters transparency and builds trust among stakeholders in the company’s
financial system (CFI Team, 2022).
In addition to understandability, the quality of financial information also requires
consistency, reliability, and comparability. These qualities ensure that the data remains useful,
trustworthy, and can be compared across periods and companies to support sound decision-
making.
2.4 The main users of accounting information
- Management: refers to the internal stakeholders who utilize the primary accounting
information of the organization. Their role extends beyond daily operations to include planning
and implementing the organization’s strategic decisions. Management must determine whether
the organization's performance requires improvement. Accounting information serves as a
valuable tool to help managers compare current performance with past performance to decide
whether action is necessary (McLaney and Artill, 2018). Additionally, when management
needs to formulate financial plans and long-term strategies for the organization, they will rely
on accounting information to understand the organization's financial situation, the current
capabilities and performance of employees, and whether the organization has the financial
flexibility to tackle new challenges. Decisions based on accounting information are more likely
to be accurate than those based solely on intuition.
- Employees: are the individuals working within the organization. Although they do
not directly participate in the decision-making process, employees greatly depend on
accounting information, which can also influence their personal decisions. Employees are
interested in accounting information because it helps them understand the organization's
position. Evaluations of salaries, bonuses, and benefits are tied to the financial status of the
organization (Tamplin, 2023).
When the organization is performing well, employees can use accounting information
from financial reports to negotiate salary increases and benefits at the end of the year.
Additionally, accounting information directly affects employees' commitment decisions; they
use this information to assess the organization's financial health and stability. An organization
with favorable business operations and stable, positive cash flow instills a sense of security in
employees and encourages long-term commitment. Conversely, if the organization faces
business difficulties, employees may consider pursuing career opportunities elsewhere.
- Investors: are individuals or entities that invest in an organization, and they rely on
accounting information to make informed and accurate investment decisions. Investors use this
information to evaluate the organization’s business situation and analyze its operational
efficiency. Specifically, accounting information helps them assess the organization's growth
potential by providing data on revenues, expenses, and profits, thereby indicating future profit
potential for investors (Tamplin, 2023). By comparing current financial results with past
performance, investors can gauge the organization’s development potential. If the organization
shows a high and stable growth capability, investors are likely to decide to invest more and
maintain a long-term commitment to the organization. For a deeper understanding of this
relationship, you can refer to sources that discuss the investor perspective on accounting
information.
- Lenders: include banks, investment companies, or individual investors who provide
loans to organizations to support their business operations. They are particularly interested in
the company’s ability to repay debts, financial health, and cash flow stability to ensure that
loans will be repaid on time. Lenders utilize accounting information to assess the organization’s
creditworthiness through financial indicators such as debt ratios and liquidity ratios. This
information helps them determine whether the business can generate stable profits, which
directly affects its ability to service interest and principal repayments (Tamplin, 2023).
Additionally, lenders use accounting information to evaluate the financial risks the
organization might face, including default risk, market risk, and operational risk. By examining
the organization’s assets listed on the balance sheet, they may require collateral such as
equipment or real estate to mitigate the risk associated with the loan.
Beyond these stakeholders, other users of accounting information include competitors,
owners, government entities, suppliers, and customers. Each of these parties leverages
accounting data to inform their decisions and strategies in relation to the organization.
2.5 Interrelationships of accounting function and other functions
a. interrelationships of accounting function and information technology
The relationship between accounting and information technology plays a very important
role in improving the efficiency, accuracy and timeliness of accounting processes. The advent
of information technology has contributed to the revolution of accounting.
Modern accounting systems heavily rely on information technology functions for data
processing and collection (The Intact One, 2019). Large organizations, for instance, can utilize
systems like SAP S/4 HANA, which allows for rapid data collection and processing,
eliminating intermediaries and enhancing overall efficiency (Chi, 2024). This integration not
only streamlines operations but also enables organizations to respond quickly to changes in the
business environment, improving decision-making capabilities.
In addition, information technology helps automate accounting processes, helping to
reduce errors and inaccuracies in manual accounting. Modern accounting software systems
such as SAP, Oracle, QuickBooks or Microsoft Dynamics allow for automatic bookkeeping,
cost analysis, invoice generation, and tracking of financial transactions. Take invoice
processing as a specific example. Instead of having to process each invoice manually,
organizations can use accounting software to scan and enter information from invoices
automatically. This not only reduces manual work, but also minimizes the risk of human error
(Saigon Polytechnic College, 2023).
In addition, information technology helps secure financial data. Today, financial
information contains sensitive data such as account balances, expenses, profits, customer lists,
and financial transactions. If this information is stolen or leaked, businesses can suffer great
financial losses, reputational damage, and even legal violations, so information security
becomes a top priority for organizations. And it is the function of information technology that
helps solve accountants' problems with data security. Information technology helps provide
security measures such as data encryption, setting passwords and data access rights for each
accountant compatible with each individual's function in the system, controlling access and
automatically recording system access behaviors to prevent unauthorized access and protect
sensitive financial data (Tạp chí Tài Chính, 2021).
Example: An example of the relationship between accounting and information technology
is that FPT Corporation uses CFS software, a “Made by FPT” solution, to manage the
company’s accounting processes. In 2007, FPT replaced the ERP Solomon IV solution with
Oracle E-Business Suite to better serve accounting and enterprise resource planning; however,
FPT could not use Oracle’s Unified (Oracle Hyperion) due to its very low responsiveness.
Therefore, in May 2019, FPT launched the CFS system as a comprehensive software solution
to simplify the financial reporting process. The CFS system has helped FPT’s accounting
process become more time-saving and accurate than before. The CFS system has helped the
company save 80% of the time in making consolidated reports and increasing the accuracy of
data. FPT Corporation currently only needs 1 accountant for financial statement consolidation
and is one of the companies that submit financial statements the earliest in the VN30 group. In
addition, the CFS system not only supports data collection and processing but also fully
supports the processes and procedures for automatically consolidating financial statements, so
the accounting staff at the companies below only need to enter correct and sufficient
information, the system will help process the procedures for preparing and consolidating
financial statements at all levels. This helps shorten the time for preparing financial statements.
Currently, FPT only takes a maximum of 5-7 days to prepare separate financial statements,
consolidated financial statements and notes to the company's financial statements (Chungta,
2023). It can be said that the relationship between accounting functions and information
technology has helped FPT Corporation save more time in accounting processes. At the same
time, it meets the organizational needs for efficiency and cost, and increases transparency in
financial reports.
b. Interrelationships of accounting function and marketing
Although accounting and marketing functions are distinct in business, the relationship
between the two functions is an important part of business growth and project effectiveness.
As we know, business activities such as launching and introducing new products require
businesses to widely promote their new services and products. Therefore, Marketing plays an
important role in developing marketing strategies to promote the company's products.
However, to save and avoid wasting the budget, the Marketing department needs to establish a
specific marketing strategy to determine the necessary budget for product promotion activities,
event organization, market research, and other marketing activities. At this time, the accountant
will rely on the Marketing department's strategy to calculate and allocate finances reasonably,
ensuring that marketing activities have adequate resources to implement.
In addition, the functions of accounting and marketing can support each other in predicting
market trends and developing long-term strategies. The marketing department not only needs
to plan short-term strategies but also build long-term strategies to maintain and develop the
brand. At this time, accounting has the role of providing detailed financial analysis and data
based on financial indicators such as revenue, profit and financial indicators obtained to create
a comprehensive picture of future market trends to help the marketing department build long-
term marketing strategies based on analysis of past financial data combined with current market
fluctuations. In addition, the marketing department, in the process of implementing marketing
strategies, will collect data on demand and shopping behavior and provide this data to the
accounting department, and the accounting department will rely on this data to analyze and
support the management in analyzing customer demand and consumption trends, thereby
making reasonable business decisions based on solid data. At the same time, data such as
shopping habits, customer feedback, and changes in consumption trends can help accountants
evaluate the success of marketing investments, helping them ensure that the budget is allocated
appropriately to marketing projects with the highest potential.
Example: At Apple, the collaboration between the accounting and marketing functions
plays an important role in marketing strategies. Especially in the company’s “Think Different”
business philosophy and customer focus, the close coordination between these functions
becomes more and more important. As we know, the collection of products in the Apple
ecosystem is extremely impressive and includes smart watches, phones, tablets, laptops and
desktops, and is very popular in our lives, this comes from the huge amount of data that their
Marketing department collects during the marketing process, and this data will be analyzed by
the accounting department into important financial information in financial reports and
management reports to help the management grasp customer trends. The relationship between
these two functions became tight when Steve Jobs returned to Apple in 1995. His first task was
to create product strategies based on simplicity and user experience, and to do that, he needed
data. Lots of data! And the combination of these two functions helped him collect valuable data
about customer preferences and market trends. From there, he created the right innovations and
spent advertising budgets on the best products (Broadbean, 2020).
2.6. Evaluate the role of accounting in providing the information to help the Manager in
decision-making to meet organizational, stakeholder and societal needs
Accounting plays a crucial role not only in the sustainable development of businesses but
also in decision-making, particularly in complex and rapidly changing environments such as
during pandemics, natural disasters, and economic crises. During these times, accounting
information becomes essential for organizations to respond effectively to the needs of
stakeholders and society at large.
- Providing accurate financial information: In times of economic turmoil, accurate
financial reporting is crucial for every business. Accounting ensures that key financial
information such as cash flow, revenue and profit are provided in a transparent and accurate
manner. It helps stakeholders and managers to better understand the company's key financial
position and its performance in a rapidly changing economic environment, helping to build
trust and improve the company's transparency and support in making business decisions. For
example, in the context of the Covid pandemic, businesses are forced to suspend operations or
switch to online working, managers cannot directly assess the business situation of the
enterprise, at this time theoretical managers and business executives rely heavily on data and
analysis to assess the certainty of business operations and planning plays a core role in
providing accurate key data documents on business performance of the enterprise (Ansi, 2021).
- Cost optimization: In a period of rapid economic change, businesses are faced with a
decrease in demand for products and services, leading to a decrease in revenue and profits of
businesses and financial difficulties in running the business due to high operating costs.
Therefore, businesses are forced to cut costs and optimize business payments, and accountants
will be responsible for collecting and analyzing data on revenue and profits of facilities and
operating costs, thereby identifying unnecessary expenses and inefficient facilities, so that the
management can make decisions to cut costs to save and maintain operations.
The complicated developments of the Covid 19 pandemic have caused the world economy
to almost be paralyzed in many countries, forcing many businesses to close, causing many
countries to fall into a state of "frozen" economy. In Vietnam, although the economy is still
developing stably due to the right policies of the government. But it still causes difficulties for
businesses in Vietnam in the business process due to reduced consumer demand but high
operating costs. However, FPT Retail still recorded miraculous growth due to the right business
decisions. This comes from the influence of the accounting department on the business
decision-making of the board of directors. Specifically, according to the financial report
collected by FPT Retail's accounting department, FPT Retail's total revenue reached 16,634
billion VND, an increase of 9% compared to 2018. Of which, FPT Shop contributed 79% with
13,141 billion VND, an increase of 5.2% compared to 2018 and FPT Long Chau contributed
511 billion VND, equivalent to 3% and also in 2019, FPT Retail decided to open 50 more FPT
Long Chau pharmacy stores, bringing the total number of stores to 70 stores. However, in 2020,
due to the impact of the Covid 19 pandemic, in the first 3 quarters, FPT Retail's revenue
decreased sharply. At this time, the accounting department played an important role in
managing and optimizing costs, by cutting costs in some areas that were facing difficulties and
investing in areas with potential. After collecting financial data from FPT Shop and FPT Long
Chau and presenting it to the board of directors, the accounting department helped the board of
directors identify areas that needed to be cut and areas that needed investment, thereby making
the decision to temporarily close some FPT Shop stores or switch to online business to save
operating costs and invest in opening more FPT Long Chau pharmaceutical stores, a popular
item during the pandemic. Thanks to that, the business situation in the fourth quarter improved
significantly, online revenue in 2020 reached 5,195 billion VND, an increase of 33% compared
to 2019, and accounted for 35% of total FPT Shop revenue. In particular, FPT Long Chau's
revenue reached 1,191 billion VND, an increase of 133% compared to 2019. With the rapid
development scale, FPT Long Chau has exceeded 200 stores, an increase of 130 stores
compared to 2019 and is a long-term growth driver for FPT Retail. In addition, according to
FPT Retail's financial report, despite facing a complicated epidemic situation, thanks to the
support of the accounting department's timely provision of financial data in making previous
decisions, FPT Retail achieved an impressive revenue of VND 22,495 billion in 2021, an
increase of 53% compared to 2020, in which, despite having to temporarily close 50% of FPT
Shop stores, online revenue for the whole year of 2021 reached VND 6,285 billion, an increase
of 21% and contributed 28%, especially thanks to the decision to invest in the pharmaceutical
sector, FPT Long Chau's revenue reached VND 3,977 billion and had a slight profit along with
the opening of 200 more stores, increasing the total number of FPT Long Chau pharmaceutical
stores to 400 stores.
From the above evidence, we can see the important role of accounting in providing
information to help management make decisions to meet the needs of the organization and its
stakeholders. FPT Retail's accounting department has provided important financial information
in a timely and accurate manner, supporting management in making reasonable business
decisions to help the organization grow and develop in the context of a rapidly changing
economy due to the Covid 19 pandemic.
III. Conclusion
In summary, in this report the author has analyzed the important role of accounting in an
organization, different types of accounting, the difference between financial accounting and
management accounting, career opportunities for accountants, necessary skills in accounting,
the relationship between accounting and different departments, and the role of accounting in
supporting management in making decisions in the context of complex economic changes.
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