There is so much paper work associated with accounts payable that people find it very difficult to manage it. Manual accounting systems have been the cause of a lot of headaches for corporate accounts payable departments for ages. For a common man or women, financial statements are just Greek. This is something, which people at the right places understood and that is why they formulated a set of rules and practices that could make the financial statements easier to understand and comprehend. This set of rules is called Generally Accepted Accounting Principles (GAAP).

These accounting principles provide a firm base to accounting. It has been seen that the accounting details could be presented and interpreted in a number of ways. These accounting principles are meant to define and determine the best possible accounting practices. There is a lot of controversy amongst accountants over theories related to accounting and these generally accepted accounting principles are meant to do away with these controversies and disagreements.

Accounting is one of the most dynamic disciplines around. It is constantly changing and growing and that is why it is essential that a Professional Canadian and Licensed Public Accountant keep up to date with all the latest changes coming to this field through annual continued professional education (CPE). It is the task of the management to prepare the financial statements of a company. They try to present their results in as good a light as they can with the help of the financial statements. A little here and there in accounting statements can change the way a company looks to the outsiders. This is the main reason why a company needs to be audited by a public certified accountant before issuing stocks in the stock market.

There are many who mistake accounting to be a process of recording financial transactions of an individual or a firm. In reality accounting is much more than that. It provides much more information than the financial transactions of a firm. Accounting is actually a discipline that deals with the process of recording different aspects of the money transactions from a financial, non financial and physical point of view.

But there is a slight problem with this definition also. Not all transaction could be recorded in terms of money on the face of the balance sheet or body of the income statement.   For example, future minimum payments for lease, mortgages and loans are reported as part of the notes to thoroughly explain the financial health of a company.

HENDRICKS & ASSOCIATES, CPA, CGAs subscribes substantially to CPE (continued professional education) to ensure we stay abreast of the latest changes in Accounting presentation, determination and measurement as required under Generally Accepted Auditing Standards (GAAS) and Generally Accepted Accounting Principals (GAAP).  In most cases, most businesses require a “Notice to Reader” level, since the small business company isn’t borrowing from the bank or trying to sell their business.  If the company has corporate borrowings a “Review” level or in special circumstances an “Audit” level of financial statements and disclosure may be required from us to satisfy the small businesses reporting requirements.