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Value of Accounting to Society

FINACT-1JK9JG

Which of the following statements properly describes the value of accounting information and the accounting profession to society as a whole? (Note: More than one answer is possible.)

A

Proper accounting allows capital providers (i.e., creditors and investors) to make well-informed decisions as to when and where to employ their capital. Without this information, they would likely "save" more and "invest" less and worldwide unemployment would be much higher.

B

Accurate financial information allows management of a company to make good decisions about how to price their goods, pay their employees, and grow their companies.

C

Standardization of accounting rules allows for companies to measure income in a similar manner and calculate and pay a fair share of the tax burden of society.

D

The resources of the world are limited. As such, it is important to the survival of mankind that they be allocated in the most efficient manner. Accounting contributes to this end by allowing for an "apples to apples" comparison of those entities who are bidding for the employment of these resources. Those entities involved in activities important to mankind will perform well and will receive a larger portion of the resources; those who are not will perform poorly and will receive less.

E

Decreased emphasis of the importance of accounting information to society would mean less jobs for accountants and an overall higher unemployment rate for society.

F

By aiding in the determination of the most effective use of the world's scarce resources, accounting information increases worldwide productivity, encourages and rewards innovation, and reduces wastefulness on the planet.