Responsibility of accounting in the modern world
The responsibility of accounting has been changing over the period of time. The modern business environment has distorted radically in a little time. In the modern world, the responsibility of accounting is not only limited to record financial transactions but also to grant a basic framework for various decision making, providing relevant information to various users and assists in both short run and long run planning. The roles of accounting in the modern world are given below.
Proportional study- In the current world, accounting information helps us to know the performance of the business by comparing present year’s profit with that of the previous years and also with other firms in the similar business.
Information to end user- Accounting plays a significant role in recording, summarizing and providing relevant and reliable information to its users, in form of economic data that helps in assessment making.
Assisting management- Management uses accounting information for short term and long term planning of business activities, to predict the future conditions, prepare budgets and different organize measures.
Substitute of memory- In the current world, every business incurs great number of transactions and it is further than human ability to memories all and each transaction. Hence, it is very essential to record transactions in the books of accounts.
