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Saturday, November 24, 2007

for complete information just visit http://en.wikipedia.org/wiki/Management






























Look up Management in

Wiktionary, the free dictionary.


Management comprises directing and controlling a group of one or more people or entities for the purpose of coordinating and harmonizing them towards accomplishing a goal. Management often encompasses the deployment and manipulation of human resources, financial resources, technological resources, and natural resources. Management can also refer to the person or people who perform the act(s) of management.


The verb manage comes from the Italian maneggiare (to handle — especially a horse), which in turn derives from the Latin manus (hand). The French word mesnagement (later ménagement) influenced the development in meaning of the English word management in the 17th and 18th centuries.[1]


Management has to do with power by position, whereas leadership involves power by influence[citation needed]. Compare stewardship.








Contents







[edit] Management functions



[edit] Different levels of management



[edit] Top-level management



  • Top-level managers require an extensive knowledge of management roles and skills.

  • They have to be very aware of external factors such as markets.

  • Their decisions are generally of a long-term nature.

  • They are responsible for strategic decisions.

  • They have to chalk out the plan and see that plan may be effective in future.



[edit] Middle management



  • Mid-level managers have a specialised understanding of certain managerial tasks.

  • They are responsible for and carrying out the decisions made by top-level management.

  • They are responsible for tactical decisions.



[edit] Lower management



  • This level of management ensures that the decisions and plans taken by the other two are carried out.

  • Lower-level managers' decisions are generally short-term ones.



[edit] Formation of the business policy



  • The mission of the business is its most obvious purpose -- which may be, for example, to make soap.

  • The objective of the business refers to the ends or activity at which a certain task is aimed.

  • The business's policy is a guide that stipulates rules, regulations and objectives, and may be used in the managers' decision-making. It must be flexible and easily interpreted and understood by all employees.

  • The business's strategy refers to the plan of action that it is going to take, as well as the resources that it will be using, to achieve its mission and objectives. It is a guideline to managers, stipulating how they ought to use best the factors of production to the business's advantage. Initially, it could help the managers decide on what type of business they want to form.



[edit] How to implement policies and strategies



  • All policies and strategies must be discussed with all managerial personnel and staff.

  • Managers must understand where and how they can implement their policies and strategies.

  • A plan of action must be devised for each department.

  • Policies and strategies must be reviewed regularly.

  • Contingency plans must be devised in case the environment changes.

  • Assessments of progress ought to be carried out regularly by top-level managers.

  • A good environment is required within the business.



[edit] The development of policies and strategies



  • The missions, objectives, strengths and weaknesses of each department must be analysed to determine their roles in achieving the business's mission.

  • The forecasting method develops a reliable picture of the business's future environment.

  • A planning unit must be created to ensure that all plans are consistent and that policies and strategies are aimed at achieving the same mission and objectives.

  • Contingency plans must be developed, just in case.


All policies must be discussed with all managerial personnel and staff that is required in the execution of any departmental policy.



[edit] Where policies and strategies fit into the planning process



  • They give mid- and lower-level managers a good idea of the future plans for each department.

  • A framework is created whereby plans and decisions are made.

  • Mid- and lower-level management may add their own plans to the business's strategic ones.



[edit] Basic elements of management


Management operates through various functions, often classified as planning, organizing, leading/motivating and controlling.



  • Planning: deciding what needs to happen in the future (today, next week, next month, next year, over the next five years, etc.) and generating plans for action.

  • Organizing: making optimum use of the resources required to enable the successful carrying out of plans.

  • Leading/Motivating: exhibiting skills in these areas for getting others to play an effective part in achieving plans.

  • Controlling: monitoring -- checking progress against plans, which may need modification based on feedback.



[edit] Theoretical scope


Mary Parker Follett (1868–1933), who wrote on the topic in the early twentieth century, defined management as "the art of getting things done through people". [2] One can also think of management functionally, as the action of measuring a quantity on a regular basis and of adjusting some initial plan; or as the actions taken to reach one's intended goal. This applies even in situations where planning does not take place. From this perspective, Frenchman Henri Fayol [3] considers management to consist of five functions:



  1. planning

  2. organizing

  3. leading

  4. co-ordinating

  5. controlling


Some people, however, find this definition, while useful, far too narrow. The phrase "management is what managers do" occurs widely, suggesting the difficulty of defining management, the shifting nature of definitions, and the connection of managerial practices with the existence of a managerial cadre or class.


One habit of thought regards management as equivalent to "business administration", although this then excludes management in places outside commerce, as for example in charities and in the public sector. Nonetheless, many people refer to university departments which teach management as "business schools." Some institutions (such as the Harvard Business School) use that name while others (such as the Yale School of Management) employ the more inclusive term "management."


Speakers of English may also use the term "management" or "the management" as a collective word describing the managers of an organization, for example of a corporation. Historically this use of the term was often contrasted with the term "Labor" referring to those being managed.



[edit] Historical development


Difficulties arise in tracing the history of management. Some see it (by definition) as a late modern (in the sense of late modernity) conceptualization. On those terms it cannot have a pre-modern history, only harbingers (such as stewards). Others, however, detect management-like activities in the pre-modern past. Some writers [Who?] trace the development of management-thought back to Sumerian traders and to the builders of the pyramids of ancient Egypt. Slave-owners through the centuries faced the problems of exploiting/motivating a dependent but sometimes unenthusiastic or recalcitrant workforce, but many pre-industrial enterprises, given their small scale, did not feel compelled to face the issues of management systematically. However, innovations such as the spread of Hindu-Arabic numerals (5th to 15th centuries) and the codification of double-entry book-keeping (1494) provided tools for management assessment, planning and control.


Given the scale of most commercial operations and the lack of mechanized record-keeping and recording before the industrial revolution, it made sense for most owners of enterprises in those times to carry out management functions by and for themselves. But with growing size and complexity of organizations, the split between owners (individuals, industrial dynasties or groups of shareholders) and day-to-day managers (independent specialists in planning and control) gradually became more common.



[edit] 19th century


Some argue [citation needed] that modern management as a discipline began as an off-shoot of economics in the 19th century. Classical economists such as Adam Smith (1723 - 1790) and John Stuart Mill (1806 - 1873) provided a theoretical background to resource-allocation, production, and pricing issues. About the same time, innovators like Eli Whitney (1765 - 1825), James Watt (1736 - 1819), and Matthew Boulton (1728 - 1809) developed elements of technical production such as standardization, quality-control procedures, cost-accounting, interchangeability of parts, and work-planning. Many of these aspects of management existed in the pre-1861 slave-based sector of the US economy. That environment saw 4 million people, as the contemporary usages had it, "managed" in profitable quasi-mass production.


By the late 19th century, marginal economists Alfred Marshall (1842 - 1924) and Léon Walras (1834 - 1910) and others introduced a new layer of complexity to the theoretical underpinnings of management. Joseph Wharton offered the first tertiary-level course in management in 1881.



[edit] 20th century


By about 1900 one finds managers trying to place their theories on what they regarded as a thoroughly scientific basis (see scientism for perceived limitations of this belief). Examples include Henry R. Towne's Science of management in the 1890s, Frederick Winslow Taylor's Scientific management (1911), Frank and Lillian Gilbreth's Applied motion study (1917), and Henry L. Gantt's charts (1910s). J. Duncan wrote the first college management textbook in 1911. In 1912 Yoichi Ueno introduced Taylorism to Japan and became first management consultant of the "Japanese-management style". His son Ichiro Ueno pioneered Japanese quality-assurance.




The first comprehensive theories of management appeared around 1920. The Harvard Business School invented the Master of Business Administration degree (MBA) in 1921. People like Henri Fayol (1841 - 1925) and Alexander Church described the various branches of management and their inter-relationships. In the early 20th century, people like Ordway Tead (1891 - 1973), Walter Scott and J. Mooney applied the principles of psychology to management, while other writers, such as Elton Mayo (1880 - 1949), Mary Parker Follett (1868 - 1933), Chester Barnard (1886 - 1961), Max Weber (1864 - 1920), Rensis Likert (1903 - 1981), and Chris Argyris (1923 - ) approached the phenomenon of management from a sociological perspective.




Peter Drucker (1909 – 2005) wrote one of the earliest books on applied management: Concept of the Corporation (published in 1946). It resulted from Alfred Sloan (chairman of General Motors until 1956) commissioning a study of the organisation. Drucker went on to write 39 books, many in the same vein.




H. Dodge, Ronald Fisher (1890 - 1962), and Thornton C. Fry introduced statistical techniques into management-studies. In the 1940s, Patrick Blackett combined these statistical theories with microeconomic theory and gave birth to the science of operations research. Operations research, sometimes known as "management science" (but distinct from Taylor's scientific management), attempts to take a scientific approach to solving management problems, particularly in the areas of logistics and operations.




Some of the more recent developments include the Theory of Constraints, management by objectives, reengineering, and various information-technology-driven theories such as agile software development, as well as group management theories such as Cog's Ladder.




As the general recognition of managers as a class solidified during the 20th century and gave perceived practitioners of the art/science of management a certain amount of prestige, so the way opened for popularised systems of management ideas to peddle their wares. In this context many management fads may have had more to do with pop psychology than with scientific theories of management.




Towards the end of the 20th century, business management came to consist of six separate branches, namely:






[edit] 21st century


In the 21st century observers find it increasingly difficult to subdivide management into functional categories in this way. More and more processes simultaneously involve several categories. Instead, one tends to think in terms of the various processes, tasks, and objects subject to management.


Branches of management theory also exist relating to nonprofits and to government: such as public administration, public management, and educational management. Further, management programs related to civil-society organizations have also spawned programs in nonprofit management and social entrepreneurship.


Note that many of the assumptions made by management have come under attack from business ethics viewpoints, critical management studies, and anti-corporate activism.


As one consequence, workplace democracy has become both more common, and more advocated, in some places distributing all management functions among the workers, each of whom takes on a portion of the work. However, these models predate any current political issue, and may occur more naturally than does a command hierarchy. All management to some degree embraces democratic principles in that in the long term workers must give majority support to management; otherwise they leave to find other work, or go on strike. Hence management has started to become less based on the conceptualisation of classical military command-and-control, and more about facilitation and support of collaborative activity, utilizing principles such as those of human interaction management to deal with the complexities of human interaction. Indeed, the concept of Ubiquitous command-and-control posits such a transformation for 21st century military management.



[edit] Nature of managerial work


In for-profit work, management has as its primary function the satisfaction of a range of stakeholders. This typically involves making a profit (for the shareholders), creating valued products at a reasonable cost (for customers), and providing rewarding employment opportunities (for employees). In nonprofit management, add the importance of keeping the faith of donors. In most models of management/governance, shareholders vote for the board of directors, and the board then hires senior management. Some organizations have experimented with other methods (such as employee-voting models) of selecting or reviewing managers; but this occurs only very rarely.


In the public sector of countries constituted as representative democracies, voters elect politicians to public office. Such politicians hire many managers and administrators, and in some countries like the United States political appointees lose their jobs on the election of a new president/governor/mayor. Some 2500 people serve at the pleasure of the United States Chief Executive, including all of the top US government executives.


Public, private, and voluntary sectors place different demands on managers, but all must retain the faith of those who select them (if they wish to retain their jobs), retain the faith of those people that fund the organization, and retain the faith of those who work for the organization. If they fail to convince employees of the advantages of staying rather than leaving, they may tip the organization into a downward spiral of hiring, training, firing, and recruiting. Management also has the task of innovating and of improving the functioning of organizations.









[edit] Managerial levels/hierarchy


The management of a large organisation may have three levels:



  1. Senior management (or "top management" or "upper management")

  2. Middle management

  3. Low-level management, such as supervisors or team-leaders



[edit] Areas and categories and implementations of management
















[edit] References



  1. ^ Oxford English Dictionary

  2. ^ Vocational Business: Training, Developing and Motivating People by Richard Barrett - Business & Economics - 2003. - Page 51.

  3. ^ Administration industrielle et générale - prévoyance organisation - commandement, coordination – contrôle, Paris : Dunod, 1966



[edit] See also


















[edit] External links
















from: http://www.accountingcoach.com/

please visit http://www.accountingcoach.com/ if you want to read it more clearly.



Accounting Basics
Learn accounting principles, introduction to financial statements, debits and credits.



Accounting Equation
Learn how transactions affect the accounting equation, balance sheet, and income statement. See the connection between the accounting equation and debits and credits.



Accounting Principles
Learn accounting principles (matching, cost, conservatism, etc.), impact on financial statements.



Activity Based Costing
Comparison of Activity Based Costing (ABC) to traditional allocation of manufacturing overhead.



Adjusting Entries
Accruals and deferrals (prepayments) necessary for accrual accounting.



Balance Sheet
Assets, liabilities, owner's equity, current vs. long-term.



Bank Reconciliation
Outstanding checks, deposits in transit, bank charges, NSF checks, journal entries.



Bookkeeping
Introduction to double entry bookkeeping, debits and credits, trial balance, and chart of accounts.



Break-even Point
Fixed and variable expenses, contribution margin, and desired profit.



Cash Flow Statement
Tips for learning indirect method, format, illustration of transactions' effect on the statement, relationship to income statement and balance sheet.




Chart of Accounts
Samples, account descriptions.



Debits and Credits
Learn accounting's double entry system. Tips for learning debits and credits, T-accounts, and sample journal entries are provided.




Depreciation
Straight-line, journal entries, use of estimates, accelerated depreciation.



Evaluating Business Investments
Capital expenditures, rate of return, payback, net present value, internal rate of return.



Financial Accounting  NEW
Learn about financial reporting and financial statements. Introduction to the role of FASB and SEC.



Financial Ratios
Common-size balance sheet and income statement, current ratio, quick ratio, accounts receivable and inventory turnover ratios, profitability ratios.



Improving Profits
Relevant amounts for analyzing, business stories to illustrate profit improvement.



Income Statement
Revenues, gains, expenses, losses, formats, reporting unusual items.




Inventory and
Cost of Goods Sold

Learn accounting's cost flow assumptions: periodic FIFO, LIFO, weighted average. Perpetual FIFO, LIFO, moving average. Estimating inventory methods.



Lower of Cost or Market
Conservatism, losses, replacement cost, net realizable value, normal profit.



Manufacturing Overhead
Examples of manufacturing overhead; allocation of overhead via direct labor, and via departmental machine hours.



Nonmanufacturing Overhead
Examples of selling, general, and administrative costs. Assigning nonmanufacturing costs to products and customers for pricing and other decisions.



Payroll Accounting
Salaries, wages, overtime pay, Social Security and Medicare taxes (FICA), unemployment taxes, fringe benefits, sample journal entries.



Present Value of an
Ordinary Annuity

Time value of money and compounding of interest of a series of equal amounts at equal time intervals. Illustrations for calculating the present value of an ordinary annuity, the amount of each payment, the number of payments, or the interest rate. Amortization of interest/discount.



Present Value of a Single Amount
Time value of money and compounding of interest of a single amount. Illustrations for calculating the present value of a future cash amount, unknown interest rate, or length of time. Amortization of discount.



Standard Costing
Direct materials price and usage variances, direct labor rate and efficiency variances, manufacturing overhead volume, efficiency, spending, and budget variances. Disposing of variance amounts.




Stockholders' Equity
Corporations, common stock, paid-in capital, retained earnings, treasury stock, stock splits, stock dividends, preferred stock, book value.

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Accountancy

for more complete information about definition of accounting just visit http://en.wikipedia.org/wiki/Accounting

Accountancy (profession) or accounting (methodology) is the measurement, statement or provision of assurance about financial information primarily used by managers, investors, tax authorities and other decision makers to make resource allocation decisions within companies, organizations, and public agencies. The terms derive from the use of financial accounts.


Accounting is the discipline of measuring, communicating and interpreting financial activity. Accounting is also widely referred to as the "language of business".[1]


Financial accounting is one branch of accounting and historically has involved processes by which financial information about a business is recorded, classified, summarized, interpreted, and communicated; for public companies, this information is generally publicly-accessible. By contrast management accounting information is used within an organization and is usually confidential and accessible only to a small group, mostly decision-makers. Tax Accounting is the accounting needed to comply with jurisdictional tax regulations.


Practitioners of accountancy are known as accountants. There are many professional bodies for accountants throughout the world. Many allow their members to use titles indicating their membership or qualification level. Examples are Chartered Certified Accountant (ACCA or FCCA), Chartered Accountant (FCA, CA or ACA), Management Accountant (ACMA, FCMA or AICWA), Certified Public Accountant (CPA) and Certified General Accountant (CGA or FCGA).


Auditing is a related but separate discipline, with two sub-disciplines: internal auditing and external auditing. External auditing is the process whereby an independent auditor examines an organization's financial statements and accounting records in order to express an opinion as to the truth and fairness of the statements and the accountant's adherence to Generally Accepted Accounting Principles (GAAP), or International Financial Reporting Standards (IFRS), in all material respects. Internal auditing aims at providing information for management usage, and is typically carried out by auditors employed by the company, and sometimes by external service providers.


Accounting/accountancy attempts to create accurate financial reports that are useful to managers, regulators, and other stakeholders such as shareholders, creditors, or owners. The day-to-day record-keeping involved in this process is known as bookkeeping.


Accounting scholarship is the academic discipline which studies accounting/accountancy.








Contents







[edit] Modern accounting/accountancy


Accounting is the process of identifying, measuring and communicating economic information so a user of the information may make informed economic judgments and decisions based on it.


Accounting is the degree of measurement of financial transactions which are transfers of legal property rights made under contractual relationships. Non-financial transactions are specifically excluded due to conservatism and materiality principles.


At the heart of modern financial accounting is the double-entry bookkeeping system. This system involves making at least two entries for every transaction: a debit in one account, and a corresponding credit in another account. The sum of all debits should always equal the sum of all credits, providing a simple way to check for errors. This system was first used in medieval Europe, although claims have been made that the system dates back to Ancient Rome or Greece.


According to critics of standard accounting practices, it has changed little since. Accounting reform measures of some kind have been taken in each generation to attempt to keep bookkeeping relevant to capital assets or production capacity. However, these have not changed the basic principles, which are supposed to be independent of economics as such. In recent times, the divergence of accounting from economic principles has resulted in controversial reforms to make financial reports more indicative of economic reality.



[edit] History of accounting



[edit] Early history


Accountancy's infancy dates back to the earliest days of human agriculture and civilization (the Sumerians in Mesopotamia), when the need to maintain accurate records of the quantities and relative values of agricultural products first arose. Simple accounting is mentioned in the Christian Bible (New Testament) in the Book of Matthew, in the Parable of the Talents (Matt. 25:19). The Islamic Quran also mentions simple accounting for trade and credit arrangements (Quran 2: 282).


Twelfth-century A.D. Arab writer Ibn Taymiyyah mentioned in his book Hisba (literally, "verification" or "calculation") detailed accounting systems used by Muslims as early as in the mid-seventh century A.D. These accounting practices were influenced by the Roman and the Persian civilizations that Muslims interacted with. The most detailed example Ibn Taymiyyah provides of a complex governmental accounting system is the Divan of Umar, the second Caliph of Islam, in which all revenues and disbursements were recorded. The Divan of Umar has been described in detail by various Islamic historians and was used by Muslim rulers in the Middle East with modifications and enhancements until the fall of the Ottoman Empire.



[edit] Luca Pacioli and the birth of modern accountancy


The first book on accounting was written by Benedetto Cotrugli (also known as Benedikt Kotruljević), a merchant from the Republic of Ragusa (modern Dubrovnik, Croatia). During his life in Italy he met many merchants and decided to write Della Mercatura et del Mercante Perfetto (On Trade and the Perfect Merchant) in which he elaborated on the principles of the modern double-entry book-keeping. He finished his lifework in 1458. However, his work was not published until 1573, as a result of which his contributions to the field have been overlooked by the general public.[citation needed]



Painting of Luca Pacioli, attributed to Jacopo de' Barbari


Painting of Luca Pacioli, attributed to Jacopo de' Barbari




For this reason, Luca Pacioli (1445 - 1517), also known as Friar Luca dal Borgo, is credited for the "birth" of accounting. His Summa de arithmetica, geometrica, proportioni et proportionalita (Summa on arithmetic, geometry, proportions and proportionality, Venice 1494), a synthesis of the mathematical knowledge of his time, includes the first published description of the method of keeping accounts that Venetian merchants used at that time, known as the double-entry accounting system. Although Pacioli codified rather than invented this system, he is widely regarded as the "Father of Accounting". The system he published included most of the accounting cycle as we know it today. He described the use of journals and ledgers, and warned that a person should not go to sleep at night until the debits equaled the credits! His ledger had accounts for assets (including receivables and inventories), liabilities, capital, income, and expenses — the account categories that are reported on an organization's balance sheet and income statement, respectively. He demonstrated year-end closing entries and proposed that a trial balance be used to prove a balanced ledger. His treatise also touches on a wide range of related topics from accounting ethics to cost accounting.



[edit] Post-Pacioli


The first known book in the English language on accounting was published in London, England by John Gouge (or Gough) in 1543. It is described as A Profitable Treatyce called the Instrument or Boke to learn to know the good order of the kepyng of the famouse reconynge, called in Latin, Dare and Habere, and, in English, debtor and Creditor.


A short book of instructions was also published in 1588 by John Mellis of Southwark, England, in which he says, "I am but the renuer and reviver of an ancient old copies printed here in London the 14 of August 1543: collected, published, made, and set forth by one Hugh Oldcastle, Schoolmaster, who, as reappeared by his treatise, then taught Arithmetics, and this booke in Saint Ollaves parish in Marko Lane." Mellis refers to the fact that the principle of accounts he explains (which is a simple system of double entry) is "after the former of Venice".


A book described as The Merchants Mirrour, or directions for the perfect ordering and keeping of his accounts formed by way of Debitor and Creditor, after the (so termed) Italian manner, by Richard Dafforne, accountant, published in 1635, contains many references to early books on the science of accountancy. In a chapter in this book, headed "Opinion of Book-keeping's Antiquity," the author states, on the authority of another writer, that the form of book-keeping referred to had then been in use in Italy about two hundred years, "but that the same, or one in many parts very like this, was used in the time of Julius Caesar, and in Rome long before." He gives quotations of Latin book-keeping terms in use in ancient times, and refers to "ex Oratione Ciceronis pro Roscio Comaedo"; and he adds:



"That the one side of their booke was used for Debitor, the other for Creditor, is manifest in a certain place, Naturalis Historiae Plinii, lib. 2, cap. 7, where hee, speaking of Fortune, saith thus:

Huic Omnia Expensa.

Huic Omnia Feruntur accepta et in tota Ratione mortalium sola.

Utramque Paginam facit."


An early Dutch writer appears to have suggested that double-entry book-keeping was even in existence among the Greeks, pointing to scientific accountancy having been invented in remote times.


There were several editions of Richard Dafforne's book - the second edition in 1636, the third in 1656, and another in 1684. The book is a very complete treatise on scientific accountancy, beautifully prepared and containing elaborate explanations. The numerous editions tend to prove that the science was highly appreciated in the 17th century. From this time on, there has been a continuous supply of literature on the subject, many of the authors styling themselves accountants and teachers of the art, and thus proving that the professional accountant was then known and employed.



[edit] Accountancy qualifications and regulation




Main article: Accountant



The expectations for qualification in the profession of accounting vary between different jurisdictions and countries.


Accountants may be certified by a variety of organizations or bodies, such as the Association of Accounting Technicians (AAT) [2], British qualified accountancy bodies including Association of Chartered Certified Accountants (ACCA) and Institute of Chartered Accountants, and are recognized by titles such as Chartered Certified Accountant (ACCA or FCCA) and Chartered Accountant (UK, Australia, New Zealand, Canada, India, Pakistan, South Africa, Ghana), Certified Public Accountant (Ireland, Japan, US, Singapore, Hong Kong, the Philippines), Certified Management Accountant (Canada, U.S.), Certified General Accountant (Canada), or Certified Practicing Accountant (Australia). Some Commonwealth countries (Australia and Canada) often recognize both the certified and chartered accounting bodies. The majority of "public" accountants in New Zealand and Canada are Chartered Accountants; however, Certified General Accountants are also authorized by legislation to practice public accounting and auditing in all Canadian provinces, except Ontario and Quebec, as of 2005. There is, however, no legal requirement for an accountant to be a paid-up member of one of the many Institutes and other bodies which are effectively a form of professional trade union. Unlike the Law Society, which can legally stop a solicitor from practicing, accountancy institutes do not have such authority. However, auditors are regulated.



[edit] The "Big Four" accountancy firms


The "Big Four auditors" are the largest multinational accountancy firms.





These firms are associations of the partnerships in each country rather than having the classical structure of holding company and subsidiaries, but each has an international 'umbrella' organization for coordination (technically known as a Swiss Verein).


Before the Enron and other accounting scandals in the United States, there were five large firms and were called the Big Five: Arthur Andersen, PricewaterhouseCoopers, KPMG, Deloitte Touche Tohmatsu and Ernst & Young.


On June 15, 2002, Arthur Andersen was convicted of obstruction of justice for shredding documents related to its audit of Enron. Nancy Temple (Andersen Legal Dept.) and David Duncan (Lead Partner for the Enron account) were cited as the responsible managers in this scandal as they had given the order to shred relevant documents. Since the U.S. Securities and Exchange Commission does not allow convicted felons to audit public companies, the firm agreed to surrender its licenses and its right to practice before the SEC on August 31, 2002. A plurality of Arthur Andersen joined KPMG in the US and Deloitte & Touche outside of the US. Historically, there had also been groupings referred to as the "Big Six" (Arthur Andersen, plus Coopers & Lybrand before its merger with Price Waterhouse) and the "Big Eight" (Ernst and Young prior to their merger were Ernst & Whinney and Arthur Young and Deloitte & Touche was formed by the merger of Deloitte, Haskins and Sells with the firm Touche Ross).


Enron turned out to be only the first of a series of accounting scandals that enveloped the accounting industry in 2002.


This is likely to have far-reaching consequences for the U.S. accounting industry. Application of International Accounting Standards originating in International Accounting Standards Board headquartered in London and bearing more resemblance to UK than current US practices is often advocated by those who note the relative stability of the UK accounting system (which reformed itself after scandals in the late 1980s and early 1990s). Accounting reform of a far more comprehensive sort is advocated by those who see issues with capitalism or economics, and seek ecological or social accountability.



[edit] Bodies and organizations



[edit] Accounting standard-setting bodies








[edit] Professional organizations




[edit] Government agencies


Government agencies enforce the securities laws. Public companies must file financial reports with these government agencies.




[edit] Oversight boards (regulators for the accounting industry)


Oversight boards are new, private-sector non-profit organisations that were set up after the Enron scandal to oversee the auditors of public companies.




[edit] Auditing standards-setting bodies




[edit] Size of market



[edit] United Kingdom


According to Accountancy Age's 2005 league table, fee income amongst the Top 50 accounting firms in the UK rose from £6.3bn to £7.0bn. This followed two successive years in which fee income had declined, largely a result of the sale by some of the larger firms of their consultancy arms. As detailed in the next section, fee income in most business areas - audit, tax, corporate finance and consultancy - rose in the 2005 survey, with insolvency and wealth management being the only segments where revenue fell.


PricewaterhouseCoopers remains the largest firm with fee income totalling £1,780m followed by Deloitte (£1,350m), KPMG (£1,066m) and Ernst & Young (£945m). The combined revenue of the Big Four accounted for £5.0bn, 72% of the fee income of the Top 50, down from 78-79% in the years up to the 2002 survey and the third year in succession a decline in their share has occurred (Chart 1). Ernst & Young's fee income is the smallest of the largest four firms, but still over three times that of the next largest firm, Grant Thornton. The amount of fee income tapers off amongst the mid-tier firms so that in total there were only 25 firms that each generated more than £15m of revenue in the 2005 survey [14]


For more details regarding British qualified accountancy professionals, refer to the page of British qualified accountants.



[edit] Topics in accounting


See list of accounting topics for complete listing.



[edit] Standards




[edit] Auditing




[edit] Accountancy methods and fields




[edit] Accounting Principles


Accounting principles, rules of conduct and action are described by various terms such as concepts, conventions, tenets, assumption, axioms, postulates.



[edit] Accounting concepts




[edit] Accounting conventions




[edit] Use of computers in accountancy




[edit] Types of accountancy


The following list is intended to give some idea of the breadth and scope of the accountancy profession:




[edit] See also




[edit] Lists of related topics




[edit] Notes and references




[edit] External links







Look up accountancy, accounting in Wiktionary, the free dictionary.



[edit] Glossaries