Chapter 16 A Computer Error

http://www.brisbanetimes.com.au/queensland/payroll-problems-improve-20100421-swho.html

Summary

Tens of thousands of health workers were underpaid, overpaid, or not paid at all since the new computerised payroll system was introduced last month. One simple program error can cause chaos among these people. "These errors are going to continue to repeat until they're fixed, and they're still not fixed," spokeswoman Julie Bignell said. Some employees already turns to charity for help. And they will continue to suffer until the error is fixed

Connection

Payroll could be very complicated. For example, a full-time worker could easily get more than 6 different kinds of detuction. In the past, we rely upon our accounting clerks to calculate UI, CPP, etc. Mistakes are easy to make. We invented calculators, computers, and softwares to help us to deal with the complicated payroll. However, mistakes these things make could cause much bigger consequences. That is one of the reasons why payroll department is one of three biggest departiments in the accounting system.

Reflection

In my weak in the accounting firm, I did some payroll journalsd for a company. What surprises me is that the emloyees have different detuctions than what the software calculated. Nevertheless, softwares like Simply Accounting help us a lot in the accounting process. However, learning how to use these softwares is critical. I know more than 10 different accounting and tax softwares, and I only know how to use two of them. Knowing how to do the payroll journals is not enough anymore.

Chapter 15 Analyzing Financial Statement

http://www.businessinsider.com/mba-mondays-analyzing-financial-statements-2010-4

Summary

This article is very useful in terms of analyzing financial statement in a insiders' point of view for small business owners. The superficial numbers could be misleading. In order to find some deeper casues of the performance of a company, the writter suggest we do a monthly average. Companies can try to bury ongoing expenses in one-time charges and inflate their earnings. For example, you’ll see that in the first year of their presentation on Google's income statement, Google made a one-time contribution to the Google Foundation. The obvious numbers showed on the financial statement are not enough, we need to dig deeper.

Connection

We did a presentation about analyzing financial statement. If we use some of the techniques in the article, we can get a higher mark. Numbers on a financial statement can be very nice. Howerer, it can also hide its financial problem. Sometimes we also need to do our own comparisons. For example, a company with a net earning of $3 billion isn't always better that another company with a net earning of $300 million. Don't overlood the obvious.

Inflection

Leaning to analyze financial statement is helpful in many ways. It helps if a person wants to open his own pracise such as a doctor or a lawyer. If we want to invest in the stock market, analyzing financial statement helps us to find the best investment. I 'm glad I take both Accounting and Financial Accounting. I can see the process in both ways. I've been doing some stock market investments recently. It's not easy to choose the best company. The techniques in the article can give me some help. I hope my investment can earn me some money.