Sally and Ed are aware that discussion of the company's accounting philosophy will come up in the next board of directors meeting, and they want to have some answers.
Suppose that One-Hundred-Percent Vitamin Co. is privately owned. What accounting philosophy would you recommend (conservative, lower profits or aggressive, higher profits)?
Be sure to explain the rationale for why the company should follow your recommended philosophy.
In addition, address the profit potential of accounting using an aggressive approach versus the conservative approach.
How would taxation affect your recommendation?
Deliverable length 3-4 paragraphs with references© BrainMass Inc. brainmass.com March 4, 2021, 8:21 pm ad1c9bdddf
Some current literature is attempting to explain that the philosophy of accounting is being challenged beyond the principles of recording transactions, and measuring revenue and expense data. These ideas suggest that we view accounting in a more thoughtful and possibly aggressive manner in which business owners would question the standards built up by the accounting profession. http://links.jstor.org/sici?sici=0001-4826%28195407%2929%3A3%3C383%3AISOAAP%3E2.0.CO%3B2-9&size=LARGE&origin=JSTOR-enlargePage
It might be said that certain recent business failures are the result of a re-examination of those principles and the attitudes towards them. In my view, the basis of the discussion relates to risk and reward. It is not ...
The 448 word solution is a comprehensive and cited view towards the basic philosophy of business ownership and risk management. The accounting records will mirror management's ideas in basic business philosophy. There are a number of factors (listed in the solution) which might impact the company's decision about the attitude towards risk management. When defined, those decisions will set a course for business philosophy.