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17 May, 2018

Solutions to improve the quality of accounting information in the process of integration

Accounting information plays an important role in the context of world and regional economic integration. However, in order to improve the quality of accounting information, enterprises should pay attention to the following contents:

The accounting information system plays an important role in economic management at both the macro and micro level, especially in the context of world and regional economic integration. Therefore, how to organize the economic concentration system in enterprises (enterprises) with quality to serve the management and decision-making process is an objective necessity. Therefore, the organization of the economic concentration system is a content that enterprises are now paying great attention to and interested in. Especially, Vietnam is gradually integrating with the regional and world economy. With the current development of science, technology and information, it is required that the provision of economic information must be done quickly, timely, accurately and reliably, to serve management and decision making. decision. Therefore, the organization of the economic concentration system in quality enterprises is a matter of great concern.

On the other hand, the purpose of use  and the level of information needs of the subjects may vary, between groups inside and outside the unit, but there are certain commonalities. The common points about the economic information needs of the information users include information about the financial position, business performance (operating activities) and cash flow of a certain accounting unit. . Therefore, they all have the need to be provided with, read and understand the economic information that reflects the economic situation of the entity in terms of: assets, liabilities, equity; Income, expenses, operating results; Cash flow; Other general information.

The differences in the purpose of using economic centers of the target groups have a direct influence on the level of general, detailed and specific information needs. The need for information in general form is a general need, mainly belonging to the target group outside the entity and is satisfied through financial statements (financial statements).

The need for detailed information mainly belongs to the target group within the unit and is satisfied through detailed accounting reports. Specialized information needs mainly belong to the target group within the unit, which are managers and are satisfied through the management accounting reporting system (international accounting).

Economic centers include financial economic centers and administrative economic centers. But in this article, we mainly refer to financial economic centers. Because financial economic centers are interested by many users.

Financial accounting information generally reflects the economic and financial information of an entity and it is mainly needed by all users, it plays a very important role for each object when used to make decisions. decide accordingly. Financial accounting is usually expressed in the following categories:

– The first type of information, which users need to make decisions, is information that reflects the financial position of the unit. This type of information is reflected on the Balance Sheet – reflecting the financial position of the accounting unit, it is related to the economic resources controlled by the accounting unit, the structure of economic resources, the ability to meet the needs of the accounting unit. the response of the financial unit when the business environment changes, the liquidity and the possibility of bankruptcy of the unit. This information helps information users evaluate the capabilities of the entity, including the various assets controlled by the entity, the amount of money borrowed from other entities, the value of resources owned by the owner. contributions, the time required to repay the loans, etc.

– The second type of information, which users need to make decisions, is the information that reflects the operational situation of the unit. This type of information is reflected on the Income Statement – which reflects the revenue, expenses and results of operations of the entity. When viewing this information, how can the information users see the ability to use the assets of the EA? whether it is effective, how is the business performance of the unit? In order to evaluate the performance of the technical unit, the user of the technical center must understand what the objective of the technical unit is. For the operating unit, its goal is profit and it is necessary to provide information for users of information to evaluate the profitability of the unit.

– The third type of information, the users need for decision making is information related to the cash flow of the unit. The information reflecting the cash inflows and outflows of the financial unit in a certain period helps the users to evaluate the main operating activities, investment activities and financial activities of the unit.

Accounting with the characteristics of providing information on a continuous, regular and systematic basis on the financial position, operating situation and cash flow of a particular entity. Therefore, economic concentration plays a very important role in economic management and it depends on each user, specifically:

– For business managers: They use accounting information to determine business purposes, make decisions for implementation, evaluate performance of goals and adjust, if necessary, to operate business. their more effective; The role of accounting in providing information to managers is to link management processes together and link businesses with the external environment.

– For owners: They care about profits, profits generated from business capital, because this is the basis for them to make necessary decisions, including decisions on profit and profit distribution. for them. At the same time, by looking at the information on the accounting statements, they can assess whether the responsibility capacity of the management departments in the enterprise is good or bad.

– For investors: They always want to invest in the place with the highest rate of return and the shortest time. Therefore, before investing, they need information about the financial situation of the business so that they can research, analyze, evaluate and then decide whether to invest or not.

– For lenders and providers of goods and services: Banks, financial institutions as well as suppliers of goods and services, before lending or providing goods, have a demand. information about the solvency of enterprises like; means that the enterprise or unit has enough payment ability or not, to have this information, the economic information must be provided.

– For tax authorities: Local and central tax authorities rely on documents provided by accountants to determine tax, excise tax and know whether units or businesses have fully implemented their obligations. service to the State or not.

– For the State: State agencies need accounting data of units and enterprises to aggregate for industries and localities and on that basis to analyze and evaluate to determine economic policies. appropriate, to promote business production and macroeconomic management.

Through the above, we see that economic concentration plays a very important role, especially in the current integration process, it becomes even more important. The information provided by the accountant is feedback about the management object. Without this information, the whole economic management system would be stagnant. On the other hand, it has an important role for different users. At the same time, accounting also effectively supports other management tools to promote their best effects. Therefore, in order for an economic information center to ensure quality and be a useful source of information for users, it must meet the appropriate requirements, reliability and comparability.

Relevancy is understood as the ability of the economic center to make a difference to the users of the economic center. In other words, the appropriateness of economic information helps users evaluate current conditions, predict the future, and evaluate the past.

The reliability of the economic information is understood that the economic information is not bound from bias towards any one user of the information and must be presented and disclosed in accordance with the set requirements.

The comparability of the economic concentration allows the users of the economic concentration to determine the similarities and differences between two or more objects to be compared. The object of comparison can be between the plan and reality, between the actual periods of the same economic unit, between the technical units and other technical units in the same industry.

In order to meet the above requirements of economic concentration, we would like to exchange and make some proposals to improve the quality of economic concentration.

Firstly:  Our state must provide detailed guidance on the provisions in the professional ethics (CM) standards for accounting and auditing: To ensure the consistency between the Government’s Decree and the professional ethics CM .

Second: The system of accounting standards and professional ethics in accounting and auditing must be consistent with international practices. The international accounting standards have introduced the concepts, requirements, conditions and general views on the transparency of financial statements.

Thirdly, it is necessary to improve the financial statement system in the following aspects: Presenting general and detailed information to ensure comparability and analysis, because currently financial statements have general information reports and information reports. Detailed information but not meeting the requirements of comparison and analysis such as notes to financial statements and income statement, the statement of equity should be supplemented because this is necessary information to evaluate the own resources of the company. Technical units, businesses, information that investors are always interested in.

Fourthly, At present, there is a tendency to conflict and contradiction in the application of the system of legal documents of the State and the system of accounting standards, thus significantly falsifying accounting information, leading to Transparency, honesty, objectivity are not guaranteed. In fact, in Vietnam, there are enterprises that explain accounting policies to record the exchange rate difference according to CM No. 10, but actually do accounting according to Circular 201/2009, the document contradicts this CM. The common situation is that the notes lack many contents as required by the CM and the accounting regime (Excerpt from http://www.tin moi.vn). Therefore, in our opinion, the processing of information and the presentation of information in the financial statements must comply with the provisions and guidelines of the Auditor General. The system of accounting and auditing standards must be drafted, completed and promulgated by the Accounting and Auditing Professional Association in accordance with international practices. Economic and financial legal documents must be promulgated by the State, which is a system of legal norms to regulate economic and financial relationships in the national economy.

Fifth, In teaching accounting science in general, it is necessary to adhere to the accepted principles and accounting standards because this is the fundamental basis for explaining, analyzing and proving the relationships in the accounting process. collect, process, present and provide accounting information. Since then, the new economic concentration has achieved the requirements: Relevancy, reliability and comparability.

In summary:  In order to meet the true transparent, honest, objective and quality financial information in the integration process, it is necessary to comply with the promulgated system of accounting standards and auditing standards and in accordance with the practice. international. All quantitative and qualitative information of accounting and auditing are processed and provided by humans in the process of practicing. Therefore, whether that information is objective, honest, transparent or not, depends a lot on the professional ethics of accountants and auditors, and on pressure on the interests of business owners. Therefore, perfecting and detailing the implementation of the accounting and auditing professional ethics CM is essential in the process of international economic integration in our country.

By: Journal of Accounting and Auditing

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