It is common that when you hear the word “accounting“, many associate that term to the accounting department of a company or the practices of bookkeeping and preparation of financial statements performed by accountants.
For academics and practitioners, however, that word takes on a still broader sense, also becoming a synonym or even a “pet name” for accounting science, science whose objective is to study the heritage of entities and intended to turn data into information useful for decision making of its users, whether internal or external.
It happens, so sorry, this goal so well defined by the great masters of accounting theory ends, in practice, entering into conflict with a reality where the accounting becomes a mere instrument to satisfy tax requirements, especially in micro and small businesses.
While in most developed countries considered the information generated by accounting by small companies are facing the entrepreneur, we can see a framework in which accounting procedures are performed almost exclusively for accountability with the IRS. Often the information generated for the external user in question does not even correspond with economic reality, aiming to relieve the company of illegally tax obligations.
The question is: How can an entrepreneur make decisions without knowledge of their real assets, financial and economic? The answer, dear reader, is very simple: He can not, at least not efficiently.
One Response to “The Role Of Accounting In the Micro and Small Enterprises Part 1”