Point Of Learning For Risk And Return †MyAssignmenthelp.com

Question: What Is The Point Of Learning About Risk And Return If I Am Planning To Be An Accountant? Answer: Introduction In todays world, there are several forms of business organizations which are composite and diverse. With the current trend of globalization, these organizations require absolute, apparent, truthful and precise details which need to be assessed speedily for them to function profitably and smoothly. Hence, an accountant is essentially required in the organization for identifying, administrating, correcting and reporting its accounts and communicating the important information so that the same can be utilized by its intended users. Over the years, there has been radical change in business environment. With the advancement in technology, business and its operations in any field has become more complex. Hence, there has been a tremendous change in the role of accountants. Accounting is the basic tool with which the owners access their fiscal performance and further make strategic decisions. Risk And Return In present modern scenario, each and every organization encounters risks that impose potential danger to the organization. Evaluation of risk at an early stage is essentially required for a business to run successfully. Strategic, compliance, financial and operational risks are the main kinds of risks. Out of these, financial risks impose great threat to the company. An accountant must perceive the risks while assessing the accounts of the company. Interest rates and foreign exchange rates are taken into consideration while assessing the same (InfoEntrepreneurs, 2009). Companys potential risks help its shareholders to make proper investment decisions. As an accountant manages, records and identifies the accounts of the company, it doesnt give clear estimation of risk but provides an insight of the risks faced by the company. However, it is also important to anticipate the returns associated with company. The correlation between risks and return is a major factor that helps an investo r in making sound investment decision. Investing in wide variety of fiscal instruments is considered an excellent accounting practice (Bradley, 2017). An accountant has to keep a record of the debts instruments and risk and return related to same helps an accountant to make correct and reliable accounting decisions. Role Of An Accountant And Why Is It Important To Learn Risk And Return An accountant is the key person who is responsible for compilation, precision, recording, scrutinizing and communication of company's fiscaloperations. The primary function of an accountant is to observe and organize correct and detailed financial records. They execute summary of the fiscal working of the company. Accountancy has been regarded as the language of business. Proper analysis of accounts by preparing assets, liabilities and assessing capital of the company is done by an accountant. He is liable for the precision of monetary dealings of the company and also for proper adherence of certain guidelines. As he is responsible for proper recording of funds of the company, it is imperative for an accountant to assess the risks and returns associated with the given firm. An auditor reviews the financial records prepared by an accountant in terms of correctness and provide insight to the intended users of the company about its current performance (Sokano, 2016). These auditors repo rt thereby provides an insight of the financial condition of the company and affects the market value of the company. All the details related to assets, liabilities, capital and expenditure that are part of financial statement are provided by the accountants and it gives summary to its owners on what and how to make future decisions of the company. Further, financial ratio analysis provided by accountants helps an organization in making a comparison with its competitors (Vitez, 2017). Hence, it is essential for an accountant to study about the risks involved and return anticipated. Moving forward, the accounting details provided by the accountant are also used by its owners in the application of loans from banks and investors. Thereby, it is significant for an accountant to have an insight of the prospective monetary returns; this information can be utilized by the banks in giving loan to the organization. Also, accountancy involves adherence to certain regulations which applies equally to different organizations, hence it provides the individuals to make a suitable and efficient comparison amongst different companies on the basis of financial analysis. There has been overall expansion of accounting industry owing to establishment of new companies, augmentation of government rules and intricate monetary conditions. Three types of accounting are followed by most of the companies i.e. management accounting, financial accounting and cost accounting (Isiavwe, 2015). The management accounting emphasize on the distribution of companys expenses to commodities, preparation of budgets and concentrate on providing fiscal details for making strategic decisions. Management accountant provides essential information within the organization. While the financial accountant formulates fiscal report with records of assets, liabilities, revenue and cash flow. All the expenses of obtaining resources is ta ken care by the cost accountant. Therefore, they all help in acquiring loans and funds from outside and provide detailed information to its intended users. Hence, complete analysis of risk and return is vital for an accountant to fairly perform his duties. Generally accepted accounting principles is the basis of accounting followed by accountants (Shanker, 2017). An accountant provides consistent, impartial and correct information by accessing risks and returns faced by the company. It is clear that it is an accountants responsibility to provide estimates and to forecast performance capacity and provide same estimation to higher management to make strategic decisions. Also, it is his duty to evaluate and administer risks and organize forfinances for the company. All the intended users of the company including owners, managers, government agencies, investors and employees makes use of the accounting information provided by the accountant to make strategic decisions. Hence, it is indi spensable for an accountant to properly access risks and anticipate returns for the future of the company as well as its shareholders and individuals associated with the company. Conclusion We hereby conclude that as per the discussion above, an accountant holds a major position in an organization. It is his responsibility to execute all the monetary tasks related to preparation and communication of fiscal records. Apart from that in the present circumstances, he needs to possess other major qualities like being truthful, apparent, goal oriented and reliable. Good methodical skills and above all having the ability to evaluate risks associated with the company to make decision for budgeting and external financing and to predict the future returns for the company is vital in todays modern, complex and dynamic business environment. References: Bradley, J., (2017), Risks Vs. Return Accounting .Available at https://smallbusiness.chron.com/risks-vs-return-accounting-74512.html (Accessed 27th September 2017) Sokanu., (2016), What does an Accountant do? Available at https://www.sokanu.com/careers/accountant/ (Accessed 28th September 2017) Isiavwe, D., (2015), THE ROLE OF THE ACCOUNTANT IN MODERN BUSINESS ORGANISATIONSH Available at file:///C:/Users/hp/Downloads/The%20Role%20of%20Accountants%20in%20Modern%20Business%20Organizations.pdf (Accessed 27th September 2017) Vitez, O., (2017), Role of Accounting in the Modern Business Environment Available at https://smallbusiness.chron.com/role-accounting-modern-business-environment-4010.html (Accessed 28th September 2017) Shanker, S., (2017), The Advantages offinance Accounting Information Available at https://smallbusiness.chron.com/advantages-accounting-information-3949.html (Accessed 27th September 2017) InfoEntrepreneurs., (2009), MANAGE RISK Available at https://www.infoentrepreneurs.org/en/guides/manage-risk/ (Accessed 27th September 2009)