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Accounting is considered as an integral part of the organization as it provides the systematic record of the funds held by the firm in the form of assets and liabilities and income and expenditure incurred by the firm in a particular time period. It helps managers to take effective and efficient decisions with regard to different functions of the organization so as to achieve the common goal of the business in an effective manner. Earlier, accounting is not considered important for the business as does not have any significant impact the value of the firm, but government has established different accounting standards which has promoted and made accounting as a separate domain. Nowadays, majority of the decisions by different parties associated with the organization are taken by considering the financial statements of the firm which are created with the help of accounting standards, policies and procedures. This report mainly focuses on the use of accounting as a framework for prediction of the accounting choices (Carey, Knowles and Clark 2011).
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