Are There Problems With Accrual Accounting?

            One of the most popular methods of recognizing transactions in the accounting world is the accrual method. The accrual method means that a transaction is recognized when the performance obligation is satisfied, and the cash is received later. However, the accrual method has two problems that can lead to the accruals “going bad”, or the cash not being received: the foggy crystal ball theory and evil managers.

            The future is hard to plan for which is why it is hard for accountants to know how much money will be received. The crystal ball is foggy because many things can happen that will prevent the seller from receiving the cash since the buyer does not pay up front (L., C., 2010). The accounting estimates can be difficult to determine, and, depending on the manager’s skills, can be inaccurate.

            Unfortunately, not all managers are honest. These evil managers will misstate the financial statements on purpose in order to receive benefits. The managers can be greedy and want to receive higher bonuses, job promotions, etc. (Doyle, 2014). When the managers purposefully misrepresent the information on the financial statements, the accrual definitely does not turn out and the cash is not received.

            Accrual accounting is a good method for accounting, but there are problems that cause discrepancies in the financial statements. The problems are caused by the foggy crystal ball theory and evil managers.

References

Doyle, J. (2014, September 9). Intermediate financial accounting 3110. Lecture at Utah State University, Logan, UT.

L., C. (2010, February 12). Cash vs accrual accounting for taxable income and expenses [Web log post]. Retrieved from http://www.sba.gov/blogs/cash-vs-accrual-accounting-taxable-income-and-expenses

What Are the Ingredients of a Professional Employee?

            Like the recipe to an excellent dish, professional employees need certain ingredients, or characteristics, which help them stand out from other employees.  Professional employees must be reliable, hardworking, and loyal. Without these characteristics, employees can never reach the professional level that they and their employers want them to reach.

                Employees must be competent so that employers can rely on those employees to complete the tasks they are assigned. They must know how to do their job and have the capability to do what they are asked. If employees cannot execute their responsibilities, then they cannot be trusted to get the job done right(Sundheim, 2013).

                In order to show that they are hardworking, employees must be action-oriented and autonomous. Professional employees do not wait to be told what to do. Rather, they take initiative and get the job done. They do not waste time while at work, but choose to fill their space with meaningful tasks.

                Above all else, professional employees are honest and loyal. It doesn't matter how talented employees are if such employees are not honest in the work they do(Ingram, n.d.). Dishonesty in the workplace will cause problems and lead to the company losing clients. Employers need to know that their employees are doing what they are assigned to do.

                In order for employees to be professional, they must be trusted, diligent, and honest. These qualities will allow professional employees to stand out among the crowd just as fine dining can be distinguished from fast-food. 

References:

Ingram, D. (n.d.). The qualities of a good & professional employee. Houston Chronicle. Retrieved from smallbusiness.chron.com

Sundheim, K. (2013, April 2). 15 Traits of the ideal employee. Forbes. Retrieved from www.forbes.com