Accounting Processes

Response to Classmate

Hello, great post!! What you say is true; a company cannot just independently decide the value of its assets and use the figures to conjure an attractive image of financial strength for its shareholders. This is a form of dishonesty, especially when assets are under/over-valued to give the desired net balance, thus the need for accounting processes. It is indeed unfair weights that the Bible talks about.

You have also mentioned Joseph as an example of a good steward. It makes me think that Christians have an advantage, especially those who make it a habit to commune with God on a daily basis. Joseph was able to plan beforehand and save the ‘world’ because of his relationship with God. Can you imagine how the corporate world would change if God directed all the decisions made? Can you imagine how many failed mergers would be averted if there were Josephs in the corporate world? How about the stock exchange; it would flourish with Christian investors able to have foresight.

This, I believe, can happen for the Bible states in Deuteronomy 28:1-13 that when we obey the voice of the Lord, being careful to do all He commands, then we shall be the heads and not the tails, among other blessings. So I guess it’s up to the church to train and encourage believers to be more hearers of the voice even as they are doers of the Word. When we listen to His voice, we will not be inclined to unfair weights and measures, but instead, we will multiply our talents by 30-60-100 fold.

ORDER A PLAGIARISM-FREE PAPER HERE

We’ll write everything from scratch

Accounting Processes

Discuss the relationship of accounting processes, accounting information and resource utilization and stewardship. Review the Scripture provided in Biblical Perspectives in this session and throughout the course (or from your own research), and explain how guidance from the Bible applies to these concepts.

Accounting Processes

The textbook reading are from

• Financial and Managerial Accounting 10^th Edition by Belverd E. Needles, Martin Powers, and Susan V Crosson

I need help in responding to a fellow student post on the discussion topic above. Thank you 

Classmate’s Post:

Accounting processes are designed to accurately record and track the financial life of a business as a going concern. The reason for all this tracking is to ensure that all resources are used to their maximum financial potential – not wasted, in other words (Needles, Powers, & Crosson, 2014)

In particular, Recognition, Classification, and Valuation are critical concepts of GAAP to ensure the most accurate of records (Needles, et al 2014). One item that has become controversial is asset valuation. Some corporations and even FASB have changed the way some assets are Classified and Valued. The result, so far, is that company financial statements look better which means stockholders make more money. However, this is not considered standard accounting practice. But from the viewpoint of the company, they might consider it as acting as good stewards on behalf of shareholders.

From a Biblical perspective, this change could be compared to using “unbalanced weights” which the book of Proverbs warns against. Also, Jesus overturned the money changer tables in the Temple for using unjust scales. It may seem extreme but if companies are able to arbitrarily decide what an asset is and what its worth then the entire accounting system could also be altered.

Joseph and the Master of the Talents can be contrasted as stewards. Joseph obviously couldn’t waste any grain. He had to know the population of Egypt as well as the surrounding countries who would be coming to buy grain – luckily God gave him a head start since he knew how long the famine would last. The Master of the Talents gave out his “grain” ahead of time in the form of Talents. He obviously wasn’t picky about what method was used to maximize his resources, but he did want his money to gain some interest, at least. He also didn’t say how long the servants would have to maximize his funds. It’s like someone giving you $10,000 to start a business and make it profitable but they don’t say what kind or how many months you have. In any case, that’s not a good excuse. The point is all of the servants knew that money is supposed to grow not just be buried in a hole.

As stewards, we may not get a second chance if we ruin our credit or falsify our income taxes. Likewise, if we live off an unrealistic budget, we could find ourselves in a bad financial situation permanently. Finally, we should treat our life like a “going concern”. We should expect it to last for a long time and adjust our financial practices to reflect it.

References

Needles, B. E., Powers, M., & Crosson, S. V. (2014). Financial and managerial accounting. Mason, OH: South-Western, Cengage Learning.

Ramanna, K. (2014, August 01). Why “Fair Value” Is the Rule. Retrieved July 16, 2019, from https://hbr.org/2013/03/why-fair-value-is-the-rule