Unit 5: Accounting

Principle
Assignment Brief 1
Student Name/ID Nguyễn Thị Thùy
Number Trang (Senia)

Unit Number and Unit 5: Accounting

Title Principles

Academic Year 2023/2024

Unit Tutor Doan Nguyen

Trang Phuong &
Ha Phuoc Vu
Assignment Title Accounting in
Context and
Budgetary Control

Issue Date 20/10/2023

Submission Date 29/10/2023

Submission Format
The submission is in the form of a
portfolio of two assignments that include:
1. A blog that should make use of
headings, sub-sections, columns,
and appropriate business-related
images and illustrations.
2. A memorandum with an
accompanying Excel spreadsheet
(raw data will be supplied). You will
insert sections of your spreadsheet
into the memorandum.
All work must be supported with research
and referenced correctly using the
Harvard referencing system (or
alternative referencing system). You will
need to provide a bibliography using the
Harvard referencing system (or an
alternative referencing system).
Inaccurate use of referencing may lead to
issues of plagiarism if not applied
correctly. The recommended word limit
for either the case study or the
memorandum is 1,000–1,500 words,
although you will not be penalized for
going under or exceeding the total word
limit.

Unit Learning Outcomes

LO1 Examine the context and purpose of
accounting.
LO4 Prepare budgets for planning,
control, and decision-making using
spreadsheets.

Transferable skills and competencies

developed
• Reasoning and analytical skills
• Written communication using a range of
media
• Manipulation and interpretation of data
using spreadsheets
• Effective communication of relevant
information across the organization and to
appropriate stakeholders
• Creation and interpretation of
information, showing how that
information can be used most effectively
to add value to an organization.
Vocational scenario
Organization
KPMG is a multinational professional
service company that undertakes
extensive business consultancy work for
its client base. Headquartered in
Amstelveen, Netherlands, although
incorporated in London, England, KPMG is
a network of firms in 145 countries with
over 265,000 employees. An analysis of
the KPMG FPI country data indicates that,
over the year ending the third quarter of
2023, the largest gains in KPMG FPI were
experienced by companies headquartered
in Canada (56.10 percent), Australia
(15.58 percent), Singapore (11.59
percent) and Malaysia (9.18 percent).
KPMG also has a policy of taking on
smaller niche clients, where they feel
there is potential for fast growth.
Role
You have recently joined the firm as a
Graduate Trainee attached to their UK
SME (Small
and Medium Enterprises) Unit, offering
accountancy and financial services to
businesses that typically have a turnover
ranging from £0.5 m to £15 m. You have
been asked to undertake some activities
as part of your ongoing training.

Assignment activity and guidance

Your supervisor, one of the firm’s Key
Account Managers, has asked you to
prepare a blog that will be used to market
and promote its accounting services to
new and existing clients. The working title
you have been given for the blog is ‘The
Role of Accounting in an Organisation’.
The blog must be presented as an online
blog in an engaging and practical way,
covering relevant academic theory, and
making use of, for example, headings,
images, and illustrations. Your blog should
include the following, but is not limited to:
• definition of accounting and its purpose
in complex operating environments.
• the main branches of accounting, career
opportunities, and job skillsets and
competencies.
• a critical evaluation of the role of
accounting in informing decision-making
to meet
organizational, stakeholder, and societal
needs within complex operating
environments.
• accounting systems and the role of
technology in modern-day accounting.
• issues of ethics, regulation, and
compliance and the extent to which they
are constraints or threats to the
organization.

Having completed the first activity, you

have been asked to work with a
hospitality and catering start-up business
that your firm has just taken on as a
client. The business particularly needs
support and guidance with budgeting and
how it can be used to inform efficient
resource allocation and support effective
control and decision-making. The founder
of the business is investing £100,000 of
their own capital and has also secured a
business loan of £50,000.
You have been asked to prepare a
memorandum that includes the following.
• Production of a 12-month cash budget
that makes use of variance analysis to
show the impact of the different individual
scenarios below:
1. discounting prices by 20 percent,
which in turn increases sales volume per
month by 10 percent
2. increasing the marketing budget by
10 percent per month, which in turn
generates an additional 20 percent in
sales revenue
3. offering suppliers a one-month
trade credit
4. reducing rental/property-related
costs by 15 percent per month.
• An evaluation of the role that budgets
play in the effective planning and control
of resources in an organization such as
your client’s. This will include both
benefits and any limitations of using
budgets and the extent to which they can
help identify problems and corrective
actions.
• An outline of a range of budgetary
control solutions, with justification, to
support organization decision-making and
ensure efficient and effective deployment
of resources.
Recommended Resources
Please note that the resources listed
are examples for you to use as a
starting point in your research – the
list is not definitive.

Weblinks
KPMG website. Available at:
https://kpmg.com/vn/en/home.html
Accounting Coach courses. Available at:
https://www.accountingcoach.com/
accounting-basics/explanation
The Association of Chartered Certified
Accountants ACCA). Available at:
https://www.
accaglobal.com/gb/en.html
Chartered Institute of Management
Accountants. Available at:
https://www.cimaglobal.
com/
Indeed Career Guide to Memo Writing.
Available at:
https://www.indeed.com/career-advice/
career-development/memo-writing-guide
HubSpot. How to write a memo:
Templates & examples. Available at:
https://blog.hubspot.
com/marketing/how-write-memo
HN Global
HN Global (2021) Reading Lists. Available
at:
https://hnglobal.highernationals.com/learn
ingzone/
reading-lists
HN Global (2021) Student Resource
Library. Available at:
https://hnglobal.highernationals.
com/subjects/resource-libraries
HN Global (2021) Textbooks. Available at:
https://hnglobal.highernationals.com/text
books

Textbooks
Dyson, J R - Accounting for non-
accounting students, 8th Edition (Pearson
Education, 2010), Chapter 1: The
accounting world, pages 2-21.
Atrill, P. and McLaney, E. (2018)
Accounting and Finance for Non-
Specialists. 11th Ed. Harlow: Pearson
Weetman, P. (2019). Financial and
Management Accounting: An Introduction.
Harlow: Pearson
Learning Outcomes and
Assessment Criteria

Pass Merit Distinction

LO1 Examine the

context and purpose of
accounting

P1 M1 D1 Critically
Examine Evaluate evaluate
the the context the role of
purpose and accounting in
of the purpose of informing
accounting the decision
function accounting making
within an function in to meet
organizatio meeting organizationa
n. organizatio l,
P2 Assess nal, stakeholder
the stakeholde and societal
accounting r and needs within
function societal complex
within the needs and operating
organizatio expectations environments.
n in the .
context
of
regulatory
and ethical
constraints.

Pass Merit Distinction

LO4 Prepare budgets

for planning, control,
and decision
making using
spreadsheets

P6 Prepare M4 D3 Justify
a cash Identify budgetary
budget corrective control
from given actions to solutions and
data for an problems their impact
organizatio revealed on
n using a by organizationa
spreadshee budgetary l decision-
t. planning making to
P7 Discuss and ensure
the control for efficient and
benefits effective effective
and organizati deployment
limitations onal of resources.
of budgets decision-
and making.
budgetary
planning
and control
for an
organizatio
n.
PART 1: BLOG
Introduction:
An Overview of Accounting:
Accounting is an important field of study
that deals with financial information
identification, recording, categorization,
summary, analysis, and reporting. "The art
and science of recording, classifying,
summarizing, and interpreting financial
data" is what the American Institute of
Certified Public Accountants (AICPA)
defines as accounting (AICPA, 2021).
Accounting is described as "the process of
identifying, measuring, and communicating
economic information to permit informed
judgments and decisions by users of the
information" by the International Federation
of Accountants (IFAC, 2021). The
importance of accounting in giving
stakeholders and decision-makers accurate
and helpful financial information is
highlighted by these definitions. According
to Kim and Lee (2018), accounting is "the
process of identifying, measuring, and
communicating economic information to
permit informed judgments and decisions by
users of the information", as they put it in
their paper published in the Journal of
Accounting and Public Policy. These
definitions highlight the contribution that
accounting makes to resource management
effectiveness, financial transparency, and
informed decision-making.
An Overview of KPMG:

Figure 1: KPMG company logo

KPMG is the abbreviation of Klynveld Peat
Marwick Goerdeler, a multinational
professional services company founded in
London, England. Among the Big 4 in the
auditing industry, which also includes PwC,
EY, and Deloitte, is KPMG, one of the
biggest auditing companies in the world.
Along with Pricewaterhouse Cooper (Pwc),
Deloitte, Ernst and Young (E&Y) are part of
the Big4, a group of largest auditing
companies in the world in both scale and
revenue. KPMG has essential service areas
for corporate clients, including: Audit &
Assurance, Tax, Advisory, and Enterprise to
support customers, organizations and
businesses in overcoming risks and
operating in the environment dynamic and
challenging business.
This blog is intended to promote and
advertise the company's accounting services
to current and future customers while also
conveying information about the nature of
accounting to provide customers with a
summary and the role of accounting in their
business operations and daily routines.
The Definition and Purpose of Accounting
in Complex Operating Environments:
The Definition of Accounting:
According to the American Institute of
Certified Public Accountants (AICPA),
accounting is defined as “the art of recording
cash flows, economic transactions, and other
events, usually to provide permanent and
complete factual information and to explain
their results.” (AICPA, 2015). This
definition emphasizes Understands the
importance of accuracy, completeness and
relevance in accounting practice and the role
of interpretation in understanding financial
information.
The Purpose of Accounting:
Accounting plays an important role in
society. It provides information about a
company and its transactions to facilitate the
decisions of users of that information (Choi
and Meek, 2011). Accounting has the role of
providing information about the activities of
a unit or an organization (Dinh Xuan Dung,
Nguyen Van Tan and Vu Quang Ket, 2007).
The purpose and requirements of accounting
are to calculate the production costs of each
type of product, each industry, each
service..., and analyze consumption results.
The results of providing each project and
service from which the necessary data can be
collected to predict the future development
direction of the business. Additionally, it
will help external users, such as investors,
lenders, suppliers and others, analyze this
company's risks, revenue and business
direction before investing in it. As a result,
accounting figures are usually useful in
drawing conclusions about predicted future
results.
The Scope of Accounting:
Accounting helps businesses manage and
control their finances effectively. Through
the construction and financial reporting,
accounting also provides managers and
investors with an overview of the business
activities of the enterprise. From there,
important business decisions can be made
based on accurate and reliable information.
The scope of accounting is the scope of
activities and functions of the accounting
industry. It includes activities such as
collecting, organizing, classifying,
summarizing, analyzing and decoding
financial data. So, to ensure your accounting
system works well for your company, you
must understand what accounting is.
Accounting is the process of collecting,
analyzing and reporting financial
information to make effective business
decisions. Accounting staff are responsible
for monitoring, recording and classifying a
business's financial transactions. Financial
reports prepared by the accounting
department provide information about the
financial situation, business results and
effective use of assets of the enterprise.
These help investors, banks and other
stakeholders evaluate the development of the
business.
The scope of accounting is very wide and
includes many different aspects of the
financial activities of a business
organization, government organization,
individual.
 For business organizations: Profit is
the top goal of businesses. Businesses
need reports from financial
transactions recorded in accounting
books to evaluate the company's
financial situation.
 For government organizations: state
accounting includes organizations
that receive, systematize, process and
analyze state accounting information.
 For individuals: Individuals also
perform financial transactions to
make personal economic decisions.
(Geektonigt, 2022)
Branches of accounting in complex
operating environment:
The main branches of accounting:
The field of accounting is divided into many
different branches based on their own sets of
principles, concepts and techniques. Antrill
and McLaney (2017) identify two main
strands and four critical sub-branches. Thus,
accounting is divided into 6 important
branches including: Financial Accounting,
Managerial Accounting, Cost Accounting,
Tax accounting, Auditing and Insolvency.
 Financial accounting: Financial
accounting is the branch of
accounting that deals with preparing
financial reports for external users
 such as shareholders, creditors and
regulators (Harris and Jacoby, 2019).
A company’s trial balance, profit and
loss account, and balance sheet are
constructed based on financial
accounting rules. These three
financial reports have to be created in
compliance with the legal
requirements.
 Managerial Accounting: The area of
accounting known as management
accounting is dedicated to giving
financial data to internal stakeholders,
such as directors and managers of a
chosen target operating agency
(Kimmel and Weygandt, 2018).
Budgets, projected cash flows, cash
flow reports, variance analysis
reports, Cost-volume-profit analysis
reports, break-even point calculations,
and other management information
systems may be used by management
to make choices that are successful.
 Cost accounting: Cost accounting is a
specialist area of management
accounting that helps managers
decide on pricing and use strategies
by calculating and allocating costs to
goods and services (Horngren et al.,
2019). Cost accountants look at
production costs to generate and
deliver recommendations to decision-
makers on how to save expenses or
when to spend more money. When
 determining prospective financial
actions, cost accountants usually look
at actual expenses in the budget.
 Tax accounting: In order to reduce
customers' tax liabilities, tax
accounting is a specific area of
accounting that entails filing tax
returns and maintaining tax
compliance (Kimmel and Weygandt,
2018). The organizational structure of
the business is used by tax
accountants to compute income and
other taxes. Tax accountants are
knowledgeable about tax laws since
they differ for different companies in
terms of taxes and income categories.
 Auditing: A subset of accounting
known as auditing entails the
impartial review of financial accounts
to guarantee their dependability and
correctness (Harris and Jacoby,
2019). Accounting Tools claims that
doing an internal audit may assist
companies in locating instances of
fraud, waste, and poor management in
addition to assisting them in locating
and resolving any possible
inaccuracies in procedures or rules.
These are but a few advantages of
conducting an audit.
 Insolvency: Insolvency is also
referred to as legal accounting,
liquidation, or bankruptcy. This
procedure's tasks include
 investigating and auditing accounting
fraud to ascertain its root cause,
fixing the entity's financial issues, and
stopping fraud of a similar nature in
the future.
These represent a small sampling of the
accounting specializations, but they illustrate
the breadth and depth of the discipline. The
use of financial statements generated in
accordance with financial accounting
principles in cost estimations, tax planning,
and management decision-making processes
ties these disciplines together.

Figure 2: The branches of accounting

Career opportunities:
According to data from the General Statistics
Office, the Department of Employment and
the Institute of Labor Sciences and Social
Affairs, the Accounting - Auditing industry
group has the most recruitment demand
today (2022). According to the "Student
Employment Situation Report" of the 2021
graduation year of Foreign Trade University
in Vietnam, the rate of students majoring in
Auditing - Accounting graduating from the
school with jobs is always 97.80%. As for
the Academy of Finance - one of the top
schools in the Vietnam in training
Accounting, Auditing, and Finance, up to
98.39% of students have jobs after one year
of graduation. Currently, Vietnam has 2,037
auditors and around 1,000 qualified
accountants. In comparison to the real
demands of the market, which call for
around 7,000 accountants and auditors, this
figure is too low (Duong Thi Thieu, 2021).
Accounting is a profession with high
recruitment demand because most
organizations, companies or businesses
operating for business purposes need this
important position in the organizational
structure. Studying accounting can do the
following jobs: Finance and Accounts
Manager, Accountant, Tax accountant,
Cost accountant, Financial advisor, Cost
estimator, Treasury analyst, etc. Accounting
jobs are also relatively easy to find. With all
the qualifications that employers require,
along with a few other related degrees and
skills, you can easily find a job position
related to the accounting industry.
 Figure 3: Career opportunities for
accountants
Job skillsets of accounting:
To be successful in your career, in addition
to the professional knowledge learned
through school, "soft skills" are very useful
in the workplace. It's important to
understand that "soft skills" can be useful in
the workplace because more specialized,
technical abilities are needed to complete
specific job duties. "soft skills" can be useful
in enhancing workplace communication and
successfully managing a diverse group of
employees.
 Analytical and Observational Skills:
Analysis and observation are skills
that an accountant needs to have.
Because general accounting work has
to do a lot of work such as collecting
documents, invoices, books,
bookkeeping, reporting, revenue and
expenditure, etc. These are all jobs
that require you to have the ability to
 observe, analyze, and evaluate arising
operations. Accountants have to
thoroughly go over financial
paperwork to make sure all the data is
correct and current. If not, their
examination can provide
unpredictable outcomes.
 Critical Thinking: The capacity to
think critically is the ability to
examine a subject from all sides. To
completely grasp the advantages and
disadvantages of a certain activity, it
entails conceiving, interpreting, and
carefully assessing knowledge
gleaned via experience, observation,
reasoning, or communication. In
order to thoroughly grasp the issue at
hand, find potential solutions, and
assess their potential ramifications,
critical thinking is an essential part of
problem resolution. Accounting uses
critical thinking abilities to assess
financial accounts, apply accounting
procedures to new data, and find
solutions to financial issues like
overspending, nonpayment, or budget
balancing in accordance with ethical
norms of practice.
 Organization: To manage multiple
clients, complete tasks on time, and
follow accurate reporting rules,
accountants need to be organized.
Accounting jobs require a significant
amount of documentation, and
 accountants need stable organization
to complete those jobs as smoothly as
possible. The best approach to
passing deadlines is organization.
 Time Management: Accountants
often work on multiple projects at the
same time but must ensure a balance
between tasks, processes and
expectations. Besides, deadlines wait
for no one. Therefore, knowing how
to manage time well will partly
reduce the burden of accountants.
 Flexibility and Adaptability: The
technological environment in which
accountants operate, as well as
regulations, will continually change.
Therefore, the best accountants are
always ready to change, while
maintaining adaptability and
flexibility in their work activities. For
example, because the COVID-19
pandemic was unpredictable. Many
accountants have had to switch to
working remotely but are still able to
serve the needs of every department
and maintain operations as usual.
 Communication Skills:
Communication is a means to bond
human relationships. Effective
communication is the ability to
convey information and exchange
ideas in a way that others understand.
This skill includes both writing and
speech. In accounting, you may be
 responsible for preparing and
presenting budget proposals, quarterly
tax reports, and other financial
reports. Successfully communicating
budget proposals and financial reports
requires the ability to speak and write
confidently and clearly.
 Team Collaboration: The capacity to
build and preserve constructive
working connections with other team
members in order to successfully
achieve shared objectives is known as
teamwork skills. Auditors frequently
travel in groups and visit client
companies to complete work while on
business travels. Effective
collaboration abilities may facilitate
task coordination among audit team
members, maximize team output, and
guarantee that each member enjoys
their job while highlighting your own
abilities.
 Figure 4: Job skillsets of accounting

Accounting Competencies:
Accounting competency is the set of skills,
knowledge and choices a person makes
when operating in an accounting
environment, bringing company and social
value.
• Risk Assessment, Analysis, and
Management: For effective management of a
company, assess, analyze, evaluate, and
manage risks by employing suitable
structures, competent judgment, and
skepticism.
• Measurement analysis and interpretation:
Identify and use reliable, verifiable measures
to analyze data for a specific purpose and
intended application.
• Reporting: Following professional
standards, regulations or the business
environment, select relevant information and
communicate to the target audience the work
completed and the results achieved. When
interacting, stay neutral and transparent.
• Research: Assemble, classify, and use data
including organizational systems,
requirements, and guidelines for analyzing
and making choices.
• Systems and Process Management:
Determine what is needed for company
operation, system(s), and associated
principles and procedures to help with the
development and implementation of systems
for procedures that are effective and
productive.
The role of accounting in informing
decision-making:

Figure 5: Accounting in informing decision-

making
The purpose of accounting information is to
give users the data they need for making
critical choices. Decision-making methods
inside and outside the organization are
supported by the accounting information that
is supplied. Accounting data is a crucial
instrument for decision support (Anderson,
2008). Their judgments will be insufficient if
they do not have adequate accounting
information. Consequently, this will
demonstrate poor decision-making.
Accountants give consumers information
that helps them see the firm more clearly.
They assist business owners in defining their
boundaries so that they can assess whether
or not they have met their objectives. The
data that managerial accounting offers is
essential for decision-making and
management controls. This is clearly shown
through the nature of accounting
information. It is the most accurate, timely,
and useful source of information compared
to information from other specialized fields.
Administrators must have reasonable choices
among many different options to make
decisions. Decisions in an organization can
have short-term effects on the organization
or can be strategic decisions that have long-
term effects on the organization. All
decisions are based on information, and
much of the information is provided by
management accounting.
The Function of Accounting in Meeting the
Needs And Expectations of Enterprises,
Stakeholders and Societies:
For Enterprises;
It will be the responsibility of management
accountants to gather data and provide
figures for these possibilities. They will
point out other factors that ought to be taken
into account before reaching an assessment,
even though the majority of the material they
offer is technical. Differently, accounting
data is used by administrators and owners to
assess and verify a company's achievements
and standing. For instance, if manufacturing
outcomes are expected to be good,
the manager may decide if to recruit
additional employees or not. Alternatively,
the owner may assess if adding new things
would be more profitable than keeping the
current ones, in which case they will decide
against making any changes. Accounting
operations connect with other business
operations of a for-profit organization.
Additionally, it will reveal each product's
possible pricing and sales quantity, letting
you adjust your budget accordingly. Thirdly,
it will determine a service charge as well as
the worth of extra advantages offered to
clients, such as the expense of rendering the
service.
For Stakeholders and Societies:
The accounting unit has a close relationship
with stakeholders and society ( Gray et al.,
2017).
In order to help stakeholders comprehend the
organization's financial situation,
accountants also supply information.
Stakeholders are any persons or groups, such
as investors, suppliers, creditors, consumers,
and workers, who have an interest in the
choices and activities of another business.
To evaluate the company's financial standing
and investment possibilities, they want up-
to-date and precise financial data. As a
result, accounting data must guarantee
integrity and openness in business dealings.
Collaboration between accountants and
stakeholders needs to be predicated on
mutual support. Reliable data from
accountants aids in the formation of
organizational linkages among stakeholders.
When the economy tends to grow, the
public has a strong interest in the issue of
social responsibility (CSR). Business and
society are closely interrelated. Society
brings benefits, creating necessary
conditions for businesses to conduct
business activities. Therefore, in order to
provide information related to the
relationship of business and society,
enterprises need to have social
responsibility accounting. This will allow
businesses to control and assess the impact
of CSR on corporate profitability. At the
same time, society expects businesses to
ensure the quality of products and be
responsible for the market and
consumption. Moreover, enterprises must
be responsible for environmental protection,
responsibility to employees and
communities and raise the sense of
sustainable development of enterprises. As
such, accountants have a role to play in
providing measurable data to demonstrate
how companies are performing against their
commitments.
The Accounting Systems:
 Figure 6: Accounting System
The accounting system is one of the most
important systems and is fundamental to the
success of any company (Kamal, 2015).
Accounting software can be computerized or
operated manually. Manual accounting
entails manually entering financial data and
transactions into ledgers, diaries, and
spreadsheets. All transactions, including
debits and credits, collections, and
payments, are manually entered in manual
accounting. Personnel with the necessary
skills and knowledge of accounting
techniques and concepts are needed for
manual accounting. Because it depends on
human computations and transcriptions, this
kind of accounting is labor-intensive and
prone to mistakes. Nonetheless, there are a
few benefits to manual accounting, including
its affordability, ease of use, and
compatibility with locations lacking
computer systems. Conversely,
computerized accounting automates
financial record-keeping, analysis, and
reporting through the use of software.
Financial data is automatically processed,
arranged, and input into a computer system
in computerized accounting. Because it
saves time and lowers the possibility of
error, this method of accounting is more
effective than manual accounting.
Furthermore, reports can be produced
quickly, and depending on the data supplied,
a variety of financial analysis may be
conducted, greatly simplifying the
accounting process in comparison to a
manual one.
The role of technology in modern-day
accounting:
In the 4.0 era, technology seems to have
become more advanced and applied
universally and absolutely. The
technological revolution has created
improvements and changes in most jobs and
occupations. Accounting is no exception.
Accountants will not have to perform tasks
manually that take a lot of time. An
organization's leadership expects more from
management accountants to have more time
to analyze trends and create broader insights
(Lawson, 2019). Advanced technology helps
accountants continuously develop more
professional financial and accounting
services, advise on transparent disclosure of
information, improve service quality, and
meet customer requirements. Software
technology platforms offer different levels of
functionality and tasks that accountants
value most, such as process optimization and
minimization of simple tasks. Some
applications such as artificial intelligence
(AI), Big Data, Cloud Computing (iCloud),
Internet of Things (ITs) will help handle
complex problems without losing money.
too much time and expense. Four of the
world's leading accounting and auditing
companies (Deloitte, PwC, EY, KMPG)
have now joined the trend of applying
blockchain technology by allowing their
employees to work based on this technology.
The digital economy and the 4.0 Industrial
Revolution are increasingly influencing the
accounting process. Thanks to information
technology, accounting activities at
businesses become more efficient,
transparent and professional (Giang and Ha,
2019). Furthermore, technology accounting
also helps businesses save time in building
workflows. Other studies also show that
technology also helps limit and eliminate
confusion and minimize accounting errors
(Cuong, 2020).
The Organization’s ethical, regulatory and
compliance issues:
Ethical issues of Accounting:
According Gowthorpe and Blake (2005)
accounting ethics is a legitimate area to learn
about and the concern not only of accounting
practitioners but also of businesses and
organizations.
Ethical issues that accountants often
encounter:
 Contains material errors or is
misleading
 Giving information recklessly
  Omission or concealment of
necessary information, which
omission or
 Concealment may lead to the
information being misunderstood
 Bias, conflict of interest
 Corruption
Causes of ethical issues in accounting:
 The accountant fails to reasonably
evaluate the results of professional
judgment affect financial or other
interests.
 Have long-term or close relationships
with customers or businesses or
organizations where they work
 Pressure from superiors
Factors to effectively evaluate an ethical
issue:
 Objectivity
 Integrity
 Independence
 Security
Regulatory and compliance issues of
Accounting:
Most businesses often put profits first, but
compliance with regulations is still the most
necessary thing. Businesses that want to be
profitable must first comply with
regulations. Governments and regulators
often enforce laws to help businesses and
organizations avoid fines. It seems that the
law is still overlooked by business
organizations. As a result, business
organizations have to pay very large fines or
enforce sanctions. If businesses follow those
standard rules, it will assist in maintaining
and controlling the operations of the
business.

Conclusion
To operate strongly and develop to become
one of the four largest auditing companies in
the world, KPMG deeply understands the
nature and functions of accountant.
Applying advanced technology to
accounting work also helps KPMG achieve
significant development in this era. With the
continuous development of technology. In
addition, analyze the importance of
accounting in influencing decision making
and meeting the needs of organizations,
stakeholders and society. KPMG employees
who not only have the basic knowledge and
skills of accounting and auditing but also
know and apply these techniques and
demonstrate the required accounting skills
and ethics.

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Dec. 2023].

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Gray, R., Dey, C., Owen, D., Evans, R. and

Zadek, S. (1997). Struggling with the Praxis
of Social Accounting: Stakeholders,
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5/1/CSEAR_dps-socenv-
strugglingpraxis.pdf.

Thi Thieu, D. (2021). Nâng cao chất lượng

dịch vụ kế toán Việt Nam trong bối cảnh hội
nhập quốc tế. [online] Tạp chí Tài chính.
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cao-chat-luong-dich-vu-ke-toan-viet-nam-
trong-boi-canh-hoi-nhap-quoc-te.html
[Accessed 30 Nov. 2023].
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PART 2: MEMORANDOM
The advantages and restrictions of
budgeting, planning, and control:
Budget plays an important role to help
businesses and organizations realize
economic and social goals. A business
budget will outline the business's revenue
and expenditure plan expressed in kind or
financial terms. Although budgeting brings
many benefits to business operations, there
are still some limitations that should be
avoided.
The definition of Budget
A budget is a list of all expenses and
revenues compiled by estimating, predicting,
and calculating in advance. In other words, a
budget can be understood simply as a
spending plan, intended to provide an overall
perspective on the current and future
performance of the business.
The advantages of Budget
Budgets help businesses create unity of
goals throughout the business because
budgeting is a matter of coordinating all
departments within the business. Besides,
the budget also helps businesses predict
future risks. Forecasting business
performance in advance will force managers
to shift from reacting to situations and events
to predicting them. This helps businesses
proactively prepare solutions to deal with
them. deal with bad situations that may arise.
Furthermore, the budget will show what
resources must be used and how to achieve
their goals, so businesses can be proactive in
their company's resources.
The restrictions of Budget
Budgeting is a time-consuming task,
especially difficult in poorly organized and
difficult environments. Besides, when
creating a book, many errors can occur. This
leads to lost budgets and financial losses for
businesses. As a result, the company's
revenue will fluctuate and it will be difficult
to survive in a volatile business
environment.
Budgetary control and planning
A budget plan is a plan that forecasts and
calculates the costs and profits that a
business will achieve over a specified period
of time in the future. The more detailed and
optimal the plan is, the higher the
operational efficiency. Budget planning is an
extremely important step, with benefits and
roles for the profits and performance of the
business. It forecasts and calculates costs,
helping businesses stay on track and avoid
overspending. Besides, this helps manage
cash resources, control costs and determine
which products/services are profitable for
the business and evaluate the performance of
departments. It can be seen that budget
planning is a measure for implementation
and comparison between reality and plans to
detect abnormalities and promptly handle
and make more appropriate adjustments.
Using the information provided, create a
cash budget for a start-up firm in hospitality
and catering.
Raw data
a. As of December 31 (the end of the
prior year the company’s general
ledger showed the following account
balances:

b. Actual sales for December and

budgeted sales for the following
months are as follows:
c. Sales are 60% for cash and 40% on
credit. All payments on credit sales
are collected in the month following
sale. The accounts receivable at
December 31 are a result of
December credit sales.
d. The company’s gross margin is 60%
of sales. (In other words, cost of
goods sold is 40% of sales.)
e. Monthly expenses are budgeted:
£35,000 per month including: rental
cost: £8,000; marketing expenses:
£4,000; salary: £12,000; depreciation
(non-cash expenses) £10,000 and
other expense: £1000.
f. Each month’s ending inventory
should equal 20% of the following
month’s cost of goods sold.
g. One-half of a month’s inventory
purchases is paid for in the month of
 purchase; the other half is paid in the
following month.
h. During February, the company
purchases a new computer for £3,700
cash.
i. During March, the company
outsources an advertisement project
for £1,580 cash.
j. During May, the company purchases
a TV for £2,000 cash
k. During July, the company purchases
an A/C for £1,000 cash
l. During August, the company
outsouces a company for the
maintenance service for £2,100 cash
m. During November, the company
outsources a company for an
advertisement project for £4,500 cash.
n. Management wants to maintain a
minimum cash balance of £16,000.
The company has an agreement with
a local bank that allows the company
to borrow in increments of £1,000 at
the beginning of each month, 15%
Step 1: Establish the anticipated cash
collecting timetable.
I assume that statement c indicates that 40%
of credit sales were collected in the month
after the transaction, and 60% of cash
purchases were collected in that month. In
addition, the accounts receivable on
December 31 are a result of credit sales in
December and will be paid back in January
of the subsequent year. The following
describes the cash collections based on the
raw data from statements a and b:
Here is the projected cash collection
schedule based on the raw data and the
calculation I've provided below:

Step 2: Create the budget and timeline for

the merchandise purchases.
The cost of goods sold is 60% of the sale,
according to statements d and f, and each
month's closing inventory is equal to 20% of
the cost of goods sold the next month. Our
budget for product purchases is as follows,
based on the data in sentence b:
Budgeted cost of goods sold = Sales * 40%

Add desired ending inventory= Budgeted

cost of goods sold * 20%

Desired ending inventory in month =

Beginning inventory following month

Required purchases = Total needs – Less

beginning inventory
Step 3: Create a timeline of anticipated
financial outlays for goods acquisitions.
Sentence g states that payments for half of a
month's inventory purchases are made in the
month of the purchase and the remaining
half is made in the month after the purchase.
Based on the company's general ledger table
in sentence a and the budget table for item
purchases in step 2, we obtain the following
expected cash disbursement schedule for
product purchases:
Accounts payable One-half month’s One-
December/ N-1 là
£24,000 data is +
inventory purchases in
following month: + inve
in m
taken from the Required purchases in Requ
Accounts Payable of following month *50% mon
table a.

= Total cash
disbursements
for purchases

Step 4: Create the cash disbursement plan

for the selling and administrative charges.
Sentence e states that monthly expenses are
budgeted for at £35,000, which covers the
following costs: £8,000 for rent; £4,000 for
marketing; £12,000 for salary; £10,000 for
non-cash depreciation; and £1000 for
supplemental costs. To determine the
projected cash outlays for marketing and
administrative charges, we shall add up the
monthly expenses listed in sentence e.

Step 5: Cash Budget

According to sentences h, i, j, k,l and m, we
also have some expenses. For example, we
spent £2,000 in cash in May to buy a new
company machine; in March, we paid
£1,580 to outsource an advertisement
project; in February, we paid £3,700 to buy a
computer; in August, we paid £2,100 to
outsource a company for maintenance
services; in July, we paid £1,000 to purchase
an A/C; and in November, we paid £4,500 to
outsource a company for an advertisement
project. Moreover, the management wants a
$16,000 minimum cash balance. The
company and a nearby bank have an
arrangement that allows the company to
borrow money at a 15% interest rate in
£1,000 increments at the start of each month.
Using a summary formula, we will gather all
of the information from the four previous
tables and feed it into the cash budget at this
stage:
Cash balance at the start of the month
+
Add cash collections in table Schedule of

expected cash collection

Total cash disbursements = Selling and

administrative purchases in step 4 +
Merchandise purchases + Advertisement

project + Equipment purchases + The

maintainance service

Scenario Analysis
Scenario 1 : Discounting prices by 20 per
cent, which in turn increases sales volume
per month by 10 per cent
=> Each month, increase sales volume by
10% while lowering prices by 20% to
maintain a lower sales volume.

Scenario 1 : Merchandise purchases

Budgeted cost of goods sold = Sales in

scenerio 1 schedule of expected cash
collections * 40%
=> Purchase budget in Scenario 1: Items'
demand declines by 20% when selling prices
fall.
Schedule of expected cash disbursements for
merchandise purchases in Scenerio 1: cash
outlays for purchasing products drop when
the merchandise budget does as well.

Cash budget of scenerio 1:

Comment:
Because the selling price fell by 20%, each
month's income will be 20% less than
projected. Additionally, the cash outflow
was lower than the initial Rawdata data.
Inventory quickly runs out when sales drop
because more products are offered to attract
buyers. A company's total revenue and profit
might be decreased via discounting. This
hinders business growth and makes
budgeting and planning difficult.
Scenario 2: increasing the marketing budget
by 10 per cent per month, which in turn
generates an additional 20 per cent in sales
revenue

Marketing budget in scenario 2:

Marketing budget (raw data) + Marketing budget (raw data) * 10%

Schedule of expected cash disbursements for

selling and administrative expenses in
scenario 2. The marketing budget will
increase 10% per month.

An additional 20% in sales revenue:

Sales revenue in Scenario 2:
Sales revenue (raw data) + Sales revenue (raw data) *20%

All other information is also impacted by

changes in sales income, advertising, and the
projected cash distribution schedule for
selling and administrative expenditures.
Timetable for expected cash receipts in
scenario 2: The total amount of cash
collected rises with sales income.
Budget for goods purchases in scenario 2:
Higher purchases are required due to higher
sales income.

Budget for goods purchases in scenario 2:

More purchases are required as sales revenue
increases.

Have the updated cash budget do the

following based on the data above:

Comment:
In scenario 2, as the advertising budget rises,
so do sales volume and income. In order to
raise income and revenue, the business may
then step up its marketing initiatives and
selling prices. or boost revenue, draw in new
clients, grow market share, etc. Conversely,
if the company's marketing plan fails, it
might negatively impact the remaining
components of the business, such sales and
profit, and result in further marketing
expenses. In conclusion, scenario 2 can be
applied if the business has an effective
marketing plan.
Scenario 3: Offering suppliers one-month’s
trade credit
Timeline for expected cash outflow for
goods purchases in scenario 3: One month
will be used to pay for all inventory
purchases.

New cash budget in scenerio 3

Comment:
In conclusion, in scenario 3, the company
grants a supplier a one-month trade credit.
This means that the supplier is not obligated
to pay for all of the products; instead, they
can settle the account after the first month of
sales. Additionally, by employing trade
credit, the business is better equipped to
adjust to shifting market conditions and
seasonal variations, guaranteeing a
consistent supply of goods even in the event
of erratic financial conditions. In the event
that a company defaults on trade credit
agreements or supplier payments, legal
action may be taken, and goods and assets
may be seized to pay off the company's
obligations. Lastly, scenario 3 can be used
until the company misuses loans or accrues a
significant amount of debt.
Scenario 4: Reducing rental/property related
costs by 15 per cent per month

The following formula may be derived from

scenario 4's requirement:
15% reduction in rental costs => Cash
outlays for selling and administration as a
whole drop
Rental cost in scenerio 4 = Rental cost in
raw data – (Rental cost in raw data *15% )

It leads to a new cash budget:

Comment:
The variance analysis indicates a monthly
rental cost decrease of 15%. In this scenario,
the organization may use the lower leasing
expenses for other endeavors, including
making new project investments or
implementing fresh business initiatives.
Reducing leasing expenses, however, may
necessitate using equipment that isn't
suitable for the purposes of the firm and
might negatively affect how it operates. For
instance, inadequate facilities will make it
more difficult for the business to operate
profitably and effectively. When cost
savings do not result in a reduction in the
effectiveness of the business's operations,
scenario 4 may be implemented.