Everyone should be required to study accounting because accounting is very essential for our daily life. There are many importance of study accounting. Asking an accountant why accounting information is important is similar as asking why fish need to live in water. This is because accounting is the backbone of financial world. Different levels of society need accounting information for different purposes.
First of all, accounting is indirectly associated to our daily life. If there is no accounting, we may not be able to communicate with each other in the financial world because as what we know accounting is the language of business. For example, when we want to spend money on something, we will determine the value of the things and think whether it is worth to buy or not. We will decide whether we will gain any profit or losses from that particular thing.
From our real life example, if we wish to buy a laptop, we will ask all the information about the price and function of the laptop. After that, we only will decide whether the laptop is necessary for us and worth to buy or not before we do any decision to purchase it.
Additionally, not only business students but also it is also vital for others stream students to have fundamental knowledge about accounting for their personal advantage. It is because as they grow up they will meet more accounting information such as personal income tax. Moreover, nowadays accountancy has emerged as a profession, together with the professions of medicine and law. The study and practice of accountancy requires a broad understanding of concepts and in-depth knowledge of specialized accounting areas.
Besides that, Malaysia now is facing shortage of Standard Charted Accountant. Students who have accounting skills will directs increase their opportunity to desire a job. Accounting is essential to prepare them to face their work in the future. Without accounting education, students will be unprepared for real world. For that reason, students are essential to study accounting.
To a family, accounting plays a significant function. When the family planning their monthly budget, they will assess interest rates to pay off their home mortgages, calculate rates for car payments, determine how much to used in their living expenses, entertainment expenses, education expenses and others. Therefore, the family will not facing over-budget problem every month as they using their accounting knowledge.
Otherwise, the family may save money if they use accounting information appropriately. Assess interest rates; calculate rates for car payments are already a part of accounting. Without accounting knowledge, how could someone assess interest rates? Thus, this can significantly show the essential of accounting in our daily life. So, how could we didn’t study accounting?!
In the business world, accounting is utilized in much greater depth, but each individual encounters some activities in his or her everyday life that requires knowledge of accounting principles. Accounting is the most basic framework of business. For businessmen; it is better for them to study accounting as they need basic accounting knowledge to easier the recording of transactions occur in their business operations.
Accounting information can help businessmen to anticipate all the losses to provide maximize profit. If they know accounting, they can be book keeping. Everyday profit and loss of the firm can be easily traced. In case, a grocery shop owner who have accounting knowledge can know how much product his shop had sold as well as profit or loss made in the end of business hour and how much stock should the owner repurchase.
Besides that, owners of companies that adapt the basic accounting principles can create their own efficient system of internal accounting controls and practices that can be used across all departments of the organization. Setting up a universal accounting system for the organization can help limit the amount of errors and reduce the risk.
The owner also can do a good job at accounting because they having the financial statements that are in the format that they are accustomed to a bank, in order to gain their confidence to loan money. Therefore, it is necessary for an owner of a company to study accounting for their own benefits.
For investors, accounting knowledge can help them to make investment decisions. Based on the accounting information, they can determine the risk and returns of their investments. For example, when an investor who want to invest in Air Asia company, he or she will look on the financial position of a company before they make any decision to invest in that company. If the company is facing losses, they will not invest in that company.
On the other side, if the company gaining profit, the investors will decide to invest in the company as the company will bring them a high return. Same as investors, creditors who have study accounting along with accounting skill will be able to understand the financial information and know whether the organization has an ability to pay back money lent so that they won’t have bad debt.
In addition, every employers and employees is better to have accounting skill in order to prepare the statement for their income tax. Or else, they need to pay for accountant fees to help them prepare the statement. As a result, their expenses will be increase due to this situation. Nowadays, government also encouraged people to study accounting. For example, people can pay income tax through e-filling.
Through this way, not only their knowledge on technology will increase but also will increase their accounting skill too. Employees who have accounting skill also can use accounting information to concern about their future in the company, prospect for promotion or salary adjustment as well as employee’s welfare.
Accounting also important since can apply to all job specialties. Secretaries must use accounting skills to manage the business check book and orders, auditors have to study financial statements to evaluate the accuracy and integrity of the business, and executives need to judge the success of their business using accounting statements from the past and present information. Besides, accounting skill is useful for economic decision. Government and taxation authorities need financial information to know the earnings in order to assess authorities the tax liabilities of the business.
For example, Malaysia government will prepare an annual budget every year and will present it. If this sector of people did not have any accounting skill, they will not be able to produce the budget that suitable for Malaysian. These phenomena all can show that accounting knowledge become more and more important nowadays. So, how cans someone didn’t study accounting?