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1. Introduction to the role of accounting and its importance

In episode 1, David looks beyond the numbers and thinks about the wider role of accountancy, the things that can go wrong in the world of accountancy and the ethical frameworks that contribute to responsible management within accountancy.

1. Introduction to the role of accounting and its importance

In episode 1, David looks beyond the numbers and thinks about the wider role of accountancy, the things that can go wrong in the world of accountancy and the ethical frameworks that contribute to responsible management within accountancy.

Preconception - an idea or opinion formed on something before knowing much about it.

Financial statements - written records of the business activities and financial performance of a company.

Tax return - an official document reporting income, expenses and other relevant financial information used to calculate the taxes a person or company should pay

Shares - a percentage of ownership in a company

Commerce - the exchange of goods or services among two or more parties.

Trade - the buying and selling of goods and services.

Capital market growth - an increase in the value of an asset or investment over time. Capital growth is measured by the difference between the current market value of an investment and its purchase price.

Sustainable - the process(es) by which something is maintained at a certain level.

Assurance - to give confidence or certainty

Shareholder wealth - the collective wealth of shareholders through their investment in a company.

Stakeholders - a party that has an interest in a company and can either affect or be affected by the business. The primary stakeholders in a typical corporation are its investors, employees, customers, and suppliers.

Fraud -  wrongful deception intended to result in financial or personal gain

Bribery - the giving or offering of money or other gifts to persuade someone to act in your favour

Corruption - dishonest or fraudulent behaviour by someone in a position of authority or power

Cybercrime - crime carried out using computers or the internet

Asset misappropriation - a type of fraud where people in charge of managing the assets of a company steal from it

Accounting / financial statement fraud - the illegal alteration of a company's financial statements to hide profits or losses

Windowdressing - making something appear deceptively attractive or favourable

Carillion - Carillion plc was a British multinational construction and facilities management services company in the UK, which was liquidated in 2018 – officially, "the largest ever trading liquidation in the UK".

Audit -an official inspection of an organisation's accounts

Financial irregularity - An intentional misstatement or omission of information related to financial transactions.

Investors - any person or other entity (such as a firm or mutual fund) who invests money with the expectation of receiving financial returns.

Public interest remit - the responsibility to prioritise the welfare of the general public

Remit - to send (something, such as a dispute or a court case) to an authority that can make a decision about it.

Executive - a person or group responsible for the administration of a project, activity, or business.

Corporate conscience - the sense of right and wrong as demonstrated through the actions of a company, its leadership, its employees and its processes and procedures.

Bookkeeping - the process of recording your company's financial transactions into organised accounts on a daily basis.

Principles - a general or basic truth on which other truths or theories can be based.

Objectivity - to look at something without bias or prejudice.

Confidentiality - the state of being secret or of keeping secrets.

Professional competence and due care - a continuing duty 'to maintain professional knowledge and skill at a level required to ensure that clients or employers receive competent professional service'.

Professional behaviour - a form of etiquette in the workplace which is linked primarily to respectful and courteous conduct.

Integrity - the quality of being honest and having strong moral principles.

Safeguards - measures to keep secure from danger or against attack.

Auditor - a person authorised to review and verify the accuracy of financial records and ensure that companies comply with tax laws.

Self-review threat - threats that arise from auditors reviewing their own work or the work done by others in their firm

Familiarity threat - the threat that due to a long or close relationship with a client or employer, a professional accountant will be too sympathetic to their interests or too accepting of their work

Governance - the act or process of governing or overseeing the control and direction of something

There are no definitions specified in this episode 🙂

Preconception - an idea or opinion formed on something before knowing much about it.

Financial statements - written records of the business activities and financial performance of a company.

Tax return - an official document reporting income, expenses and other relevant financial information used to calculate the taxes a person or company should pay

Shares - a percentage of ownership in a company

Commerce - the exchange of goods or services among two or more parties.

Trade - the buying and selling of goods and services.

Capital market growth - an increase in the value of an asset or investment over time. Capital growth is measured by the difference between the current market value of an investment and its purchase price.

Sustainable - the process(es) by which something is maintained at a certain level.

Assurance - to give confidence or certainty

Shareholder wealth - the collective wealth of shareholders through their investment in a company.

Stakeholders - a party that has an interest in a company and can either affect or be affected by the business. The primary stakeholders in a typical corporation are its investors, employees, customers, and suppliers.

Fraud - wrongful deception intended to result in financial or personal gain

Bribery - the giving or offering of money or other gifts to persuade someone to act in your favour

Corruption - dishonest or fraudulent behaviour by someone in a position of authority or power

Cybercrime - crime carried out using computers or the internet

Asset misappropriation - a type of fraud where people in charge of managing the assets of a company steal from it

Accounting / financial statement fraud - the illegal alteration of a company's financial statements to hide profits or losses

Windowdressing - making something appear deceptively attractive or favourable

Carillion - Carillion plc was a British multinational construction and facilities management services company in the UK, which was liquidated in 2018 – officially, "the largest ever trading liquidation in the UK".

Audit -an official inspection of an organisation's accounts

Financial irregularity - An intentional misstatement or omission of information related to financial transactions.

Investors - any person or other entity (such as a firm or mutual fund) who invests money with the expectation of receiving financial returns.

Public interest remit - the responsibility to prioritise the welfare of the general public

Remit - to send (something, such as a dispute or a court case) to an authority that can make a decision about it.

Executive - a person or group responsible for the administration of a project, activity, or business.

Corporate conscience - the sense of right and wrong as demonstrated through the actions of a company, its leadership, its employees and its processes and procedures.

Bookkeeping - the process of recording your company's financial transactions into organised accounts on a daily basis.

Principles - a general or basic truth on which other truths or theories can be based.

Objectivity - to look at something without bias or prejudice.

Confidentiality - the state of being secret or of keeping secrets.

Professional competence and due care - a continuing duty 'to maintain professional knowledge and skill at a level required to ensure that clients or employers receive competent professional service'.

Professional behaviour - a form of etiquette in the workplace which is linked primarily to respectful and courteous conduct.

Integrity - the quality of being honest and having strong moral principles.

Safeguards - measures to keep secure from danger or against attack.

Auditor - a person authorised to review and verify the accuracy of financial records and ensure that companies comply with tax laws.

Self-review threat - threats that arise from auditors reviewing their own work or the work done by others in their firm

Familiarity threat - the threat that due to a long or close relationship with a client or employer, a professional accountant will be too sympathetic to their interests or too accepting of their work

Governance - the act or process of governing or overseeing the control and direction of something

Accounting standards - the official set of criteria for financial reporting.

The double entry system - an accounting system where every transaction is recorded in two accounts: a debit (money owed) to one account and a credit (money received) to another.

Year-end - the end of the financial year. In the UK, the financial year runs from April (as opposed to January in a calendar year).

Trial balance - a statement of all debits and credits in a double-entry account book, highlighting any inconsistencies

Profit - the excess money made by a company after the costs and expenses of running the business are accounted for.

Accounting period - any timeframe (often 12 months) used for financial reporting. The transactions that fall within the given date range form part of the statements or reports for that accounting period.

Taxation - the imposing of tax

Tax computation - the documentation provided with an income tax return

Disallowable expenditure - things paid for that cannot be claimed as a tax deduction

Tax deduction - an item you can subtract from your taxable income to lower the amount of taxes you owe

VAT (Value-added Tax) - a tax on goods or services applied on every level of a supply-chain where value is added that is paid by the consumer. For example VAT is added when: a raw materials producer sells a product to a factory; when the factory sells the finished product to a wholesaler; when the wholesaler sells it on to a retailer; and, finally, when the retailer sells it to the consumer who will use it.

PAYE (Pay As You Earn) - the UK tax authority (the HMRC)'s to collect income tax and National Insurance from employees

NI (National Insurance) - the system of compulsory payments by employees and employers to provide government assistance for people who are sick, unemployed, or retired.

Payroll - a list of a company's employees and the amount of money they are to be paid.

Commercial - relating to the activity of buying and selling, especially on a large scale

Investment appraisal - the analysis done to consider the how much profit an investment on an asset over its lifespan, including considerations of how affordable it is and strategic fit.

Financing - the process of providing funds for business activities, making purchases, or investing

Dividend - a reward paid to the shareholders of a company for their investment in the company

Dividend policy - the policy that a company uses to determine the amount and frequency of dividends that are paid out

Audit procedures - a technique for collecting and analysing data to provide evidence

Audit seniors - someone who plans and executes internal audits for the business, as part of the company's annual audit plan

Audit file - a file that contains records of an audit

Data analytics - the process of examining sets of data to draw conclusions about the information they contain

Financial systems - the systems a company uses to govern its income, expenses, and assets to maximise profits and ensure sustainability

Benchmarking - a process of measuring the performance of a company's products, services, or processes against those of another business considered to be the best in the industry

Deficiency - a lack or shortage

Consulting - providing professional or expert advice

Finance director - The person in charge of the financial affairs of an organisation

Company strategy - a clear set of plans, actions and goals outlining how a business will compete with others ‍Internal control systems - systems used by a company to make sure their financial reporting is honest

Corporate governance - the system by which companies are directed and controlled.

UK Corporate Governance Code - a standard setting out principles of good practice for listed companies on board composition and development, remuneration, shareholder relations, accountability and audit.

Risk assessment - a systematic process of evaluating the potential risks that may be involved in an activity.

Accountability - being accountable or responsible for something

Remuneration - money paid for work or a service

Remuneration package - the complete package of monetary benefits an employee receives for their work, ie. their salary plus any bonuses

Bottom line profit - a company's profit after all expenses have been deducted from their income. It appears on the bottom line of the financial statement.

Pristine Capitalist Viewpoint - a viewpoint that emphasises that stakeholders view Corporate Social Responsibility as a barrier to business.

Climate crisis - the threat of highly dangerous, irreversible changes to the global climate.

Myopic - short-sighted

Social capital - the networks of relationships among people who live and work in a particular society, enabling that society to function effectively

Relationship capital - the value of a company's relationships with its customers

Environmental capital - environmental resources that are essential for human survival and economic activity

Carbon neutral - having a balance between emitting carbon and absorbing carbon from the atmosphere with carbon sinks (anything that absorbs more carbon than it emits)

UN Sustainable Development Goals -a list of goals set out by the UN to eradicate poverty and achieve a sustainable world.

Forensic accounting - the use of accounting skills to investigate fraud or embezzlement and to analyse financial information for use in legal proceedings.

Due diligence - within the world of finance, this means providing companies all the information they need to make an informed decision about whether to buy or merge with another company, or not.

Corporate finance - the division of finance that deals with how corporations address funding sources, capital structuring, and investment decisions.

Environmental auditing - an environmental management tool for measuring the effects of certain activities on the environment against set criteria or standards.

Carbon reduction budgets - the amount of carbon dioxide (CO2) emissions permitted over a period of time to limit global warming

Circular economy - model of production and consumption, which involves sharing, leasing, reusing, repairing, refurbishing and recycling existing materials and products as long as possible.

Greenwashing - a marketing strategy that conveys a false impression that your company is doing more to help the environment than it really is

Corporate Social Responsibility (CSR)- a business model that helps a company be socially accountable to itself, its stakeholders, and the public.

Narrative Reporting - the non-financial information included in annual reports to provide a broader picture of the company's business, its market position, strategy, performance and future prospects.

Integrated Reporting - brings together information about an organisation's strategy, governance, performance and prospects in a way that reflects the commercial, social and environmental context within which it operates.

Holistic - an approach that addresses the whole of something, not just a specific part

Capital - wealth in the form of money or other assets

Eroded - something that has worn away, diminished or been destroyed.a.

Profit warning - a statement issued by a company advising the stock market that profits will be lower than expected.

Contractor - a person providing service for a company on a temporary basis. They aren't an employee of the company

Litigation - the process of taking legal action.

Reform - to make changes to improve something

Aquisition - buying or attaining something

Merger - combining two things together, in this case two companies