Business Law in Accounting

Accounting is the system of recording, reporting and verifying financial information for individuals and businesses, including income, expenses, value of assets, and so on. However, Business police I, takes what is unremarkably known of invoice and moves into a nonher bena, one which includes civil and barbarous liabilities, centralize law, ethics and the Sarbanes-Oxley Act of 2002. By establishing the basics in Business Law, controllers are able to check the risks of their particular profession.Accountants are faced with civil and criminal liabilities which are based on the controllers ability to do his or her job effectively and heavyly. Accountants face civil liabilities when they do not complete the work satisfactorially to what was agreed to. Even Codes of Ethics urge accountants to not agree to do work that they know they do not surrender the knowledge or while to complete. Competency is a key gene to being a successful accountant, and not meeting competency goals clear cause problems for young accountants entering the field.By intellectual the basics of burn law, it is easier for accountants to find the necessary information to allow them to do their jobs competently. If accountants know that it takes usual regard, or a meeting of the minds, to begin twitch negotiations, then they stinkpot figure if they are reviewing a contract, approximately type of mutual consideration must have occurred, as well as a end and acceptance portion of the conversation. Also, if an accountant knows that the contract is for the sale of goods, then the accountant would know that the UCC Article 2 has to be used, instead of simple contract law.Knowing this would help the accountant understand how the asset or products purchased postulate to be accounted for, because without detailed information in the contract, UCC Article I col filling procedures take place. These procedures are an attempt to take vagueness and give it some detail, but the gap filling detail is not much break in than the original, thus the accountant can still be stuck, lost, not lettered how to account for a particular product, and not knowing at which time responsibility and risk for the product exchanges hands. The Sarbanes-Oxley Act was signed into law in 2002 by George W. Bush.The original thought behind SOX was to regulate the accounting profession, delinquent to the greed that had resulted in huge economic crashes amongst top corporations such as Enron and WorldCom. SOX assisted in setting up regulatory organizations for each scene of the accounting process. These organizations are designed to ensure that accounting practices and auditing practices are ethical, legal and professional for public U. S. companies. Unfortunately, SOX does not regulate sequestered companies, but private companies cannot give rise financial hardships for outside investors, so private companies are not in need of these type of regulations.Business Law I helped create an un derstanding amongst the students regarding what is actually pass judgment of them once work as an accountant begins. A naive accountant would believe that all he or she needed to do was ensure that the data being entered in is even off and if not, fix it through a series of journal entries. However, after fetching this class, it is apparent that this is an incorrect assumption. Understanding the civil and criminal liabilities that can be charged due to negligence or fraud, whether intentional or not, is improbably important to accountants and CPAs.Without understanding these potential problems, an accountant would not be able to understand the level of the problem, or be able to assess the gravity of the situation, whatever that situation may be. Even though accounting is a financial profession that takes the value of income, expenses, assets, and other items, and reports, analyzes, records and verifies these amounts, Business Law allows for the review of the profession in gene ral. Accountants have to understand what is legally expected of them when working with clients records and reports, and how these legal expectations can be brought upon them, and what their rights are.Without understanding the responsibility and risk that takes place for a company, an accountant would not understand why it is so important to establish self-command and when that particular ownership exchanges hands. Accountants also must understand what risks and responsibilities their particular profession run as well, and ensure that they are competently performing their jobs so that there is no question as to if an accountant was negligent, or was derilect in the performance of his or her duty.