In order to operate business efficiently, it is essential to understand the situation of the company accurately. However, it is difficult to see the big picture, the situation of the company as a whole, by simply focusing on terms such as “sales volume”, “utilization”, and “yield”. No one can figure out whether or not the activities of each division has been well-balanced or the profit necessary for the business activities has been obtained unless a financial statement is prepared.
As one can see, accounting is a common language for business and a mirror that reflects the overall picture of the company. In order for the accounting figures to precisely reflect the results of each divisions’ activities, it is necessary to build a solid internal control system (a system which product shipments lead to sales, a system which reconciles inventory records on a regular basis, etc.). In addition, accounting rules are created upon human consensus and accounting figures are not absolute. Several accounting policies can be applied to a single accounting event, and the amount of impairment such as fixed assets can vary greatly depending on the estimated future cash flows. The important thing is to ensure that the management philosophy and business goal are thoroughly understood throughout the company, and that the company’s basic philosophy is reflected when choosing accounting policies and estimating future cash flows.
A company is not just a tool for earning profits, but a structure for achieving business goal based on its management philosophy, and profits are just a means for doing so. If the accounting figures are based on a sound management philosophy and accurately reflect the movement of goods and money resulting from the activities of each division, it will invigorate the company and earn the trust of society.
We hope to contribute to the prosperity of our clients’ business and the realization of a fair and reliable society by working through audits so that accounting functions as the language for business.
Sohken Nichiei Audit Corporation
Ueichi Bldg., 1-6-10 Ginza, Chuo-ku,
Tokyo 104-0061, Japan
TEL +81-3-3561-7491 FAX +81-3-3561-7499
4-3-12 Muromachi Nihonbashi, Chuo-ku,
Tokyo 103-0022, Japan
TEL +81-3-3241-3777 FAX +81-3-3241-3774
12 persons (5 CPAs; 2 Assistant CPAs; 5 Others)
59 persons (50 CPAs; 7 Assistant CPAs; 2 Others)