ACCOUNTING

According to A. W. Johnson; “Accounting may be defined as the collection, compilation and

systematic recording of business transactions in terms of money, the preparation of financial
reports, the analysis and interpretation of these reports and the use of these reports for the
information and guidance of management”.

According to the American Accounting Association [AAA]; “Accounting refers to the process of
identifying, measuring and communicating economic information to permit informed
judgments and decisions by users of the information”.

According to Weygandt, Kieso, and Kimmel; “Accounting is an information system that

identifies records and communicates the economic events of an organization to interested
users”.

Watts and Zimmerman (1978, 1979). The 1978 paper helped generate the positive accounting
literature which offers an explanation of accounting practice, suggests the importance of
contracting costs, and has led to the discovery of some previously unknown empirical
regularities. The 1979 paper produced a methodological debate that has not been very
productive. This paper attempts to remove some common misconceptions about methodology
that surfaced in the debate. It also suggests ways to improve positive research in accounting
choice. The most important of these improvements is tighter links between the theory and the
empirical tests. A second suggested improvement is the development of models that recognize
the endogeneity among the variables in the regressions. A third improvement is reduction in
measurement errors in both the dependent and independent variables in the regressions.
FINANCIAL MANAGEMENT / RELATIONSHIP OF FINANCIAL MANAGEMENT

“Business finance deals primarily with rising administering and disbursing funds by privately
owned business units operating in non-financial fields of industry.” – by Kuldeep Roy

“Financial Management is an area of financial decision making, harmonizing individual motives

and enterprise goals.” By Weston and Brigham
“Financial Management is the Operational Activity of a business that is responsible for
obtaining and effectively utilizing the funds necessary for efficient operation.” by Joseph Massie

“Financial management is the area of business management devoted to a judicious use of

capital and a careful selection of sources of capital in order to enable a business firm to move in
the direction of reaching its goals.” – by J.F.Bradlery

“Financial management is the application of the planning and control function to the finance
function.” – by K.D. Willson

“Financial management may be defined as that area or set of administrative function in an

organization which relate with arrangement of cash and credit so that organization may have
the means to carry out its objective as satisfactorily as possible .“ - by Howard & Opton

According to F.W.Paish, Finance may be defined as the position of money at the time it is
wanted. In the words of John J. Hampton, the term finance can be defined as the management
of the flows of money through an organization, whether it will be a corporation, school, bank or
government agency.

According to Howard and Upton, “finance may be defined as that administrative area or set of
administrative functions in an organization which relates with the arrangement of each and
credit so that the organization may have the means to carry out the objectives as satisfactorily
as possible.