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Bulletin of the Transilvania University of Bra şov • Vol. 2 (51) - 2009 Series V: Economic Sciences

QUALITY OF THE SERVICES

Mirela Camelia BABA 1

Abstract: Often, the accounting services are vital for the success of a , and their is very important, both for the users of accounting information, as well as for the providers of services. The present paper highlights the role of the accounting services in the processes of planning, coordination and development of the management policies of the economic entities. There a re identified a series of factors which are responsible for the quality of the accounting process and for the efficiency of the activity undertaken by the accountants.

Key words: users of financial-accounting information, , quality costs, accounting information, accounting service.

1. Introduction A few considerations about the quality of The recent , the accounting services were presented by corroborated with the globalization, have Johnson, Eric and Walker, Kenton in their determined an increased need of book, “Delivering Quality Accounting accounting information, and managers and Services” in 2006. Their article presents investors need accurate, credible, pertinent steps that the firms and internationally comparable financial in the U.S. can apply to improve information to ground their decision upon. management accounting services. The The trust in an entity entirely depends on quality of information in their opinion may the degree the managers perceive and be measured by accuracy, completeness, understand the accounting-financial relevance, and timeliness. Therefore the information, on its openness and firms can improve management accounting transparency. The management of an entity services and achieve a number of benefits, ground their decisions on a big volume of including improved management of the accounting data and it is its duty to release accounting function, more effective them outside the entity, the management allocation of accounting resources, improved bears the responsibility of the production communications between providers and and release of financial-accounting users, a higher and information. As they have immediate satisfaction levels. Quality accounting access to the accounting information, the services are those that use managers give a special attention to the frequently and consider important in carrying way the published information is perceived out their work. The result of quality service outside his firm, because this tells the third delivery is a high level of customer parties how the institution is managed. satisfaction. Studies such as Peasnell, 1982 and Östermark & Aaltonen, 1995 examined

1 Dept. of , Accounting and Economic Theory, Transilvania University of Bra şov. 60 Bulletin of the Transilvania University of Bra şov • Vol. 2 (51) - 2009 • Series V a certain type of accounting information decision they make in order to exert a (in the form of financial ratios) that are corresponding managerial . An quite sophisticated for the typical investors essential component of the quality level is to reach and to be influenced by Iselin E. the client’s perception, or the user of the R. (1996) states that accounting accounting information, about the extent to information affects decision quality which the service he accesses fulfills through three main variables: , his/her demands. Therefore, an economic information load and data load. Some other entity must include among the strategic qualitative and quantitative aspects objectives the increase of the satisfaction regarding the accounting information were level of its customer for the products it presented in specialized literature by offers. In the context of the present Celine Michailesco (2000), Eddy Vaasen economic crisis, the planning and (2002), Brigitte Eierle (2008). implementation of a personalized of quality enssurance of the accounting 2. The Components of the Management services, of quality management, of Quality of the Accounting Services represents the essential condition for the The accounting department is the survival and development of the economic representative of the financial and entities. The economic theory say s that the economic decisions made in order to value of a commercial good or a service is ensure the optimal functioning of an determined according to the utility, that is economic entity, and the production and the satisfaction it brings to the consumer, communication of the accounting and this judgment is applicable to the information can be seen as a service. The production and communication of quality of the accounting services depends accounting goods. Regardless of the on the quality of the proceedings used in purpose and the means of communication, the production and release of the the satisfaction of the user’s needs must be accounting information, but also on the measured and ensured constantly. The quality of the accounting statements and service, namely the financial-accounting their conformity to reality and the actual department, must be able to offer, apart laws. A qualitative accounting process from the chronological recording of the implies competent proceedings, methods, accounting operations, the drawing-up of working techniques and personnel, because the financial statements, records, fiscal these facts ensure the trust of the users of statements, to provide services of information. The accounting and fiscal consulting, assistance when services must pursue the production of the auditing services proceed for periodic information that responds to the demands checking, solutions to improve the of the various users, otherwise, the trust and to reduce them. The accounting quality they grant to the methods that were used objectives of the economic entities could be and even to the accounting professionals oriented towards the satisfaction of the that produced it falters. The role of the needs and expectations of the users of the accounting department is to offer accounting information in what regards: the information necessary to the management professional ethics and the abiding by the of the economic entities and to elaborate actual legislation; constant amelioration of the statements on which the decisions are the accounting information that is made made; that’s why the timely information public, including of the means of have a special importance for the top communication; the effectiveness of the managers and for the grounding of the production and communication of the Baba, M. C.: Quality Management of the Accounting Services 61 accounting information; taking into account eradication of the sources for non- the social and environmental . quality and of errors; In order to fulfill their objectives, the  On the human level, the know-how, the accounting professionals must respect some experience of the staff must be fundamental principles, based on: integrity, valorized in order to constantly improve objectivity, independence, professional the quality and the performance of the competence and good will, confidentiality, production of the accounting professional ethics and professional and information; technical regulations.  On the organizational plan, the The components of the quality amelioration of the quality can be management are: quality planning, quality obtained by a better of the control, quality accomplishment and accounting process, by its simplification quality improvement. and permanent adjustment.  Quality planning refers to all the The quality can refer to the performance processes necessary to determine the of the accounting works and services, firm’s main objectives in the field of corroborated with the time dimension. On quality, as well as the resources and the other hand, non-quality in accountancy means necessary to accomplish them; could indicate: time loads, incorrect  Organizing the quality activities information, unsatisfied clients, unqualified consists of attributing charges and staff, the incompetence of the professionals responsibilities to the staff, referring to that exert the accounting profession, quality, and settlement of the function incomplete financial statements, breaks of ladder; the actual legislation. The fundamental  Training refers to the processes through problem regarding the organization of an which the personnel, the human accounting system is connected to the way resources, are motivated to accomplish the accounting information is made up and the objectives that aim to quality; released. Accounting must record,  includes the set of the determine, make stocks, check, provide surveillance and quality control and communicate a whole range of activities that are meant to detect information, proceeding to the shaping and deficiencies, prevent them and representation of the transactions through implement new objectives ) the financial and management accounting. The quality of the accounting process can be regarded as providing for clients 3. Factors Which Depend on the Quality inclusive accounting services, accurate of the Accounting Information accounting information and a reasonable Quality also means accuracy and price. The quality of the accounting convenience of the accounting data, from process can be seen in the availability, for the moment they are presented to be the users, of thorough accounting services processed, until they are found in actual which are also accurate and have a financial situations. Quality in accounting reasonable price. depends on various factors, such as: The actions of the economic entities, in  Organization and of order to ameliorate the quality, are accounting in the specific entity. Quality undertaken, generally, on three levels: depends on the ability of the accounting  On the technical level, the objective of system of the entity to provide the economic entity must result in the professional and of good accounting quality services, as audit, fiscal 62 Bulletin of the Transilvania University of Bra şov • Vol. 2 (51) - 2009 • Series V

consulting, administration and financial professional regulations is imperative, consulting; the reference of the quality control of  Material and technical endowment of the accounting services performed by the accounting. The informatics system the accounting professionals. must be checked, as the support for the information accounting system (if 4. Factors that Affect the Quality of the minimal requirements for accounting Accounting Information programs are accomplished), as well as The errors in application of the the conditions of archive registration for accounting principles, the practices of the accounting documents, the access to manipulation of the results, the the accounting data. In order to fulfill incompatibilities in the exertion of the the demand for quality, an accounting accounting profession, the legislative application must respect three essential instability, inflation are elements which requests: to correspond to the needs of can affect the quality of the accounting the beneficiary; to be functional; to be information. For instance, the use of the adjustable to the legislation, technical historic cost in order to evaluate goods requests. The quality of this program indicates the real value of the elements of depends upon the track down of errors patrimony at the time of their assessment, in accounting and the speed of the but further on, there is the possibility that it providing of the data. The accounting cannot reflect the reality. On the other program and accounting system in hand, the constituting of provisions as an general must ensure the confidentiality effect of applying the principle of of information; prudence, seen as fiscal deductions has the  The modality of putting into practice role to decrease the unfavorable influence the regulations. Development of the of the historic cost about the supra- confidence of the users of accounting of the results. If the provisions information in the final product of are not registered, that can lead to a accounting is realized in the first place distorted image of some of the elements of by obeying the norms and the current the patrimony, but also to over-evaluated legislation; net profits. In accounting, it often happens  Competence an independence of the that the real loss of an entity is bigger than accounting professionals . Accounting the loss as it appears in the balance sheet, had always had as main enterprise the or the real benefit of the company can be activity of professionals well-known for higher than the one in the balance sheet. their competence to produce, explore The specialty literature characterizes the and certify quantified economic data, politics of manipulation of information presented according to the conventional presented in the financial statements as regulations. Accounting professionals ‘creative accounting’ practices. The can display a positive, but also a ‘creative accounting’ was defined as a negative manner to manifest their presenting technique of the annual creativity. In a positive direction, their accounts of the companies that allows the creativity in the service of recovering display of a new and favorable image of the system errors, derived form strict the outcome and the balance sheet. The appliance of the regulations. Such a accountants are able to artificially situation leads to the quality manipulate the expenses and the income as improvement of the information follows: deliveries of goods and services provided to the users. Appliance of with the emission of the voucher in the Baba, M. C.: Quality Management of the Accounting Services 63 following closing, the records of the the capacity of the accountant to issue real, current period for which the invoices were updated, concrete and complete not received are not registered; an information. It also includes the exaggerated increase of the depreciations professional training, competence, and provisions expenses; the choice of a integrity and objectivity of the accountants. method of allowance for depreciation The receiver’s efficiency refers to the which can model the result in favor of the receiver’s capacity to appropriate the company; delaying the registry of the information transmitted by the issuer, to interests of the financial activity, or from understand and apply it. The efficiency of acquisitions or in installments; not the process of emission-reception refers to making the registry of or expenses the production process of the accounting from/with rents; over-evaluating or under- information, to the quality and quantity of evaluating .the current production. The the broadcasted information. The final incompatibility of the exertion of the efficiency is more difficult to estimate, accounting profession is another factor because the effects are visible after the which could affect the quality of the accounting information has been used by accounting services. Unfortunately, the recipients. It is relatively easy to determine book-keeping of some companies the effort (expenditures allotted for (especially of those with a low income gathering information), but the effects are figures) is organized and managed by harder to quantify. unqualified personnel, who do not have the There are many factors that influence the training and the qualification needed and activity of accountants and they can be these facts could affect the quality of the placed in two categories: accounting process at a very important  Quantifiable factors: the number and the level. The accounting profession must be structure of the employed personnel, practiced by qualified individuals, who have especially accountants, financial the specific professional know-how. necessities and availability, needs of informational resources, computers etc. 5. Indicators for Evaluating the  Unquantifiable factors: management Efficiency of Account’s Activity quality, professional know-how of The complexity of character of the accountants, knowledge of the accountants’ activities lies in the fact that it accounting legislation, the objectivity, is a process undertaken by two categories competence and integrity of the of persons: the subject of the activity (the accountants. issuer, namely the accountant) and the Accountants’ results and, implicitly, the object of the activity (the recipient of efficiency of their work for the company, information, namely the user). It can be depend not only on their professional said that the efficiency of the accounting training and competence, but also on the activity is a synergetic effect of individual way they manage their time. Accountants efficiency of each of the participants, and it must schedule their time in such a manner consists of: the efficiency of the subject of that allows them to carry on more activities the activity (the issuer of information), the in parallel, such as: gathering, processing efficiency of the object of the activity (the and storing of information, and, depending on the context, even the transport of recipient of information), the efficiency of deduction reports and statements where the process of emission-reception (the they are needed. Often, they need to allot accounting process) and the final time for accounting, fiscal and financial efficiency. The issuer’s efficiency refers to consulting the managers of the company 64 Bulletin of the Transilvania University of Bra şov • Vol. 2 (51) - 2009 • Series V require. In our opinion, the indicators future decisions, ensuing the increased which could measure the efficiency of the subjectivity of its explication and its use. accounting activity can be: the quantity of The value of information can be defined as information gathered in a time unit; the the margin between the net profits quality of the broadcasted information in generated by choice of decision after relation with the total volume of information is obtained and the net profits information; added value = meeting of obtained by taking the same decision requirements in relation with the cost of inconsequential of the information. The net information; the result of the decisions value of the information is, than, the substantiated on the accounting subtraction between the gross value and information; the percent of accountants the cost of information. To be useful in the among the employees of the company; the process of decision-taking, the accounting ratio between the obtained results and the information must correspond with production efforts. requirements for quality, the most important being: relevance, reliability, 6. The Value of Accounting Information comparability and intelligibility. and the Quality Decision The value of accounting information The value of an item of information may be counted considering its main depends upon the impact it has over the characteristics and its cost [5]:

 1 F  Vi = K  ∑ f ()()()A,T,Y,n − g P,Y  − h A, F,T ,  F n=1 

Considering: Vi = Information value i; K = the benefit obtained from correct decision; F = the period of time in which the information is used; n = the number of periods covered by the time F; A = the information accuracy; T = the necessary time to obtain the information; Y = the number of the decision taken in “n” period; P = the probability to take correct decisions without having this information.

The user only is in the position to ameliorated), to increase the efficiency and approve the information by using it the internal of the company, properly and efficiently. The accounting increasing the managers’ productivity (this information helps the user to take the right means that the coordination of the decision in his activity, and the functional elements of the entity are very information depends both on its good); to improve creativity and characteristics and on other external productivity of the individual and group factors. In order that the information to be decision making factors of the organization utilized by an economic entity, it must (this means an improvement of the tools fulfill the following conditions: to give a for gathering real and updated information, fast response to the modification of the an improvement of the analysis of conditions of the competition (in this way information and of the quality of the the new opportunities can be exploited decision and release, assistance and survey faster and the weaknesses can be of the implementation of the actions and Baba, M. C.: Quality Management of the Accounting Services 65 decisions of the management). The role of accounting information relevant? What the accounting department is to provide the tools do the managers use frequently? Is it management of an entity with the possible to improve the quality of the necessary information and to draw-up accounting process taking into account the statements for the substantiation of their managers’ attitudes and opinions towards decisions. it? Is the accounting information credible The assessment of costs and benefits is for managers?. Synthesizing, the following the result of a professional judgment. One facts can be inferred from the applicative cannot establish accurately the benefits study: the managers turn their attention determined by accounting information. For especially towards non-standardized lack of direct methods of assessment of the situations and reports or statements, but benefits the accounting information brings, which are fit for the nature of their the focus is transferred on costs. Many attributions and activity; they prefer the types of costs should be taken into simplified reports, which use a more account: direct costs of production and accessible language and an adequate publishing the information, direct costs of technology for the managerial knowledge. alternative sources of information, the cost The managers propose an accounting of interpretation and assessment of system which is easier to follow and check, information, the cost the user (investor) where the producers of financial- should support if he would have produce accounting information know exactly the information by himself/herself, the which their attributions are as well as the indirect costs (for example the side effects problems they have to confront, thus of publishing information about the helping the manager to economize time activity of the firm). Like other units, the and money and directs him to investments outsourcing units register general that improve the economic and financial expenses. The general outsourcing costs performances of their company. The are put together with the costs destined for financial-accounting information, in the the labor force when deducing the general managers’ opinion, must be brought up-to- cost of the outsourcing. The costs implied date, help the increase of the efficiency and by the production of accounting performance of the firm, improve the information could also be structured as managers’ productivity and creativity. follows: costs for gathering of information, costs for processing the accounting 8. Conclusions information, costs for storing the To conclude, the accounting information accounting information, costs for can play a direct part in the lowering of the communicating the accounting incertitude which the user of the information. accounting information can have at a certain moment, it has a higher degree of 7. Opinions Regarding the Quality of credibility comparable with other sources Accounting Information of information, are understandable to all The objective of this research aims, inter the users that have knowledge in the alias, to find some answers to the financial-accounting field, and the costs for following questions: What is the role of the it are lower than for the other sources of accounting in grounding managerial information. The image an economic entity decisions? What can the accounting offer acquires through the financial statements to managers and how do they see the offer and the quality of the information depend of accounting information? Is the on the professionalism and the objectivity accounting information useful for the of the producers of the accounting analysis and decisions made by managers? information, but also on the correct Is the way managers perceive and use the perception of the users of information of 66 Bulletin of the Transilvania University of Bra şov • Vol. 2 (51) - 2009 • Series V the message transmitted by means of the information and the continuity of the accounts, on their personal quality and release of information. understanding. The economic entities, through accounting, must provide financial References information that allows the investors’ access to the accounting information, and 1. Baba, M. C. 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