Regulatory and Ethical Aspects of Accounting

INTRODUCTION
Accounting plays an essential role in any type of organization and it contributes
hugely in operating the business. In this assignment, I will put myself as an accountant of
HD Dental Clinic to evaluate the purposes and functions of accounting in operating the
business. This essay will demonstrate the role of accounting in both regulatory and
ethical aspects by consulting and researching information from different sources to find
out the most appropriate answers. The responsibility of accounting systems within the
organization and with the stakeholders is also discussed. The scope of this research is
limited to the HD Dental Clinic and some other stakeholders.

Task 1
Accounting has three main functions: identification, recording and
communication. The accounting system has to identify and process financial information
by monetary term, thus ensuring the payments of cash flows in and out of the company.
Accounting makes financial records for organizations. It is utilized to song expenses from
commercial enterprise operations in addition to an organization's profits. It also can be
applied to are expecting economic achievement and the destiny desires of a company to
create budgets and take benefit of current opportunities. Accountants use these statistics
to put together monetary statements utilized by commercial enterprise specialists and
authorities officials. The ultimate purpose of accounting is to provide information
concerning business performance and income statements for users to help their decisions
making (Atrill & McLaney, 2017). The users of accounting information can be separated
into two groups: external users (creditors, investors, customers...) and internal users
(managers, employees,...). The data provided for external users is called financial
accounting and the one for internal users is managerial accounting.
A business entity is a enterprise that exists independently of those who own the
business. (Weetman, P., 2019). There are three primary forms of business entities: sole
trader, partnership and limited liability company. Within the case of this assignment, Dr.
Hoang Duong is a sole trader who owns HD Dental Clinic. A sole trader is an individual
who enters into business alone, either selling equipments or providing services
(Weetman, P., 2019). Because the business of sole trader is single owner, Dr. Hoang
Duong will have to take all the benefit of the good time and risk of the bad times from the
business activities of the clinic.
Managerial accounting will identify and record the economic events by the
monetary values of HD Dental Clinic and determine how internal processes such as
purchasing equipment, expenses for electricity, account receivable, and revenue from
services performance... impact the company's finance. The accountants are involved in
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daily financial functions like payroll and invoicing. They conjointly arrange for future
business choices primarily based on monetary reports and analysis by making budgets.
Accountants generate reports to facilitate a business to increase productivity and impact
economic growth. Accounting may facilitate decisions however staff is compensated for
their work supported how wages have an effect on the company's profits. Since social
control accounting isn't for public view, accountants in this field will use their ways and
choose information to advise company leaders concerning trends and output (Indeed
Editorial Team, 2021). By recording transactions, the accountant will create accounting
reports for the owner, which is the communication function of accounting. The
accounting reports can help Dr. Hoang Duong comprehend his enterprise’s condition.
Therefore, he can make the best decision for operating the business.
Financial accounting will use data from the past to analyze a company’s cash
flows. The accountant who adds this field produces statements supposed for public use.
They maintain structures for reportage and filing all the money transactions a business
makes and then report the business results of the clinic. Hence the external users can base
on the report to make their decisions. For instance, in case Dr. Hoang Duong wants to
borrow money from the bank or other creditor, he has to give them the financial report of
his company as evidence. The bank (creditors) will depend on the financial information
to decide whether they can give credit to the company or not. Additionally, the inventors
will base on income statements to evaluate the developing potential of the clinic to make
their decisions to invest in the company and how much money they should capitalize on.
Moreover, the Tax Authority of the government also depends on the accounting reports to
make sure that the clinic fulfills the tax obligation. Accounting is responsible for news
the money workings of the corporate and ensuring they change to any or all native and
national laws and guidelines.
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Task 2
1. Looking from an objective point of view, both owner and employee of HD Dental
Clinic have offended the environmental protection law, public health law, and ethical
principles of accounting.
In the regulatory aspect, HD Dental Clinic has infringed public health and
environmental protection law by mixing medical waste with domestic waste and
disposing of untreated rubbish to the city's landfill. Environmental protection activities
mean activities that are carried out in order to maintain the surrounding environment
natural and clean, to limit adverse impact on the environment and to face environmental
incidents; to improve environmental pollution and degradation and to recover and
enhance the environment; to exploit and utilize natural resources appropriate and
economically, and to protect biological diversity (Viet Nam National Assembly, 2001).
The clinic has not treated and sorted waste in accordance with the regulation. Moreover,
they did not record the waste treatment expenses, which may lead to mistakes in
accounting reports. Disposing infectious wastes to the environment is forbidden by the
Ministry of Natural Resources and Environment of Ha Noi city. Besides the pecuniary
penalties, the enterprise that infringed the law can be faced the risk of suspending
business activities. More problems may arise if the inhabitants want to sue the clinic for
public fitness care. Being stopped commercial enterprise operation may result in
stagnancy and losing reputation, which might badly affect the long-term profitability and
survival of the clinic.
In the ethical aspect, HD Dental Clinic did not want to pay for the proper
treatment process, so they chose the illegal way to dispose of the waste. Their actions do
not ensure transparency and faithful presentation in accounting reports. The accounting
target is to provide relevant, timely information for user decision-making, so the
accountants must behave in an ethical manner so that the information they provide users
will be trustworthy (Warren, C. S., et al., 2020). The company did not disclose the
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