Agency 16: Accounting
The sixteenth agency in the community deals with accounting. The agency’s primary concern is facilitating proper financial reporting. It does so by setting up systems, guidelines, and training needed. The agency is part of the Data Bureau. Other agencies in the bureau are Agency 17 (Data and Publishing), and Agency 18 (QHSE).
Accounting involves the keeping of systematic, accurate, and complete financial information about a business. This information assists businesses in budgeting and planning. The information also helps businesses to evaluate possible causes of action while helping investors to correctly establish the financial health of a business, as well as its prospects.
There are two main branches of accounting: financial and management accounting. Financial accounting refers to the recording, summarizing, and reporting of financial transactions about a business. Financial accounting is historically oriented, typically reporting on financial events that have already occurred. The information that financial accounting summarizes and reports is usually for the consumption of external parties, who are interested in seeing how the business is doing to make better decisions about their engagement. Financial reporting tends to result in objective information, closely guided by generally accepted financial principles and guidelines.
Management accounting is concerned with analyzing and interpreting financial information to organize and manage a business. It is more detailed than financial reporting, providing important information such as cost accounting, profit per product, and other similar aspects. Management accounting is used to make decisions on marketing, resource allocation, and future financial projections. While it includes historical data, it is more focused on the future. It is mainly for internal consumption, as business owners try to use financial information to make business strategies. In these respects, management accounting is broader than financial accounting and contains sometimes subjective information.
How the agency works
The Accounting Agency is served by an executive presidency. The executive presidency consists of four presidents, serving and representing the four major demographic groups in the community: married men (A), married women (B), single women (C), and single men (D). The presidency sets up and manages the agency’s strategies, policies, and automated system, making adjustments as necessary to enhance performance.
The Accounting Agency’s executive presidency, together with the executive presidencies of the Data and Publishing and QHSE agencies together form a bureau board. The bureau board provides an additional check and balance on presidencies and agencies. It also assists in guiding individual agencies’ decision-making on matters that are of common interest to all three agencies.
Within the board, presidents from the same demographic form a three-member demographic presidency. The demographic presidency is an important avenue for mentoring and training fellow presidents, as well as identifying and working on matters that cut across the three agencies and affect a particular demographic.
|Demographic presidency A||Demographic presidency B||Demographic presidency C||Demographic presidency D|
|Executive presidency, Accounting (16)||16A||16B||16C||16D|
|Executive presidency, Data, and Publishing (17)||17A||17B||17C||17D|
|Executive presidency, QHSE (15)||18A||18B||18C||18D|
As part of the Data Bureau, the Accounting Agency is served by a team of 24 operational presidencies. The presidencies carry out the operational duties of the agency. They interact extensively with other community public servants, contractors, and the automated system. They also advise the executive presidency on changes that need to be made to the automated system and the agency’s strategies to serve the community better. Each of the 24 presidencies sits in a specific district building.
Operational presidencies also belong to 12-member boards and demographic presidencies. Since each presidency has four presidents (married men – A, married women – B, single women – C, and single men – D), there are a total of 96 presidents serving the bureau, and organized into 32 demographic presidencies.
Branch presidencies and boards
The captain serves the community in the branch, assisting up to 10 limited partners and their dependents access services. Captains are a service extension of the Human Relations Agency (agency 1). The agency handles recruitment, induction, and the social welfare of participants. Captains’ services to their limited partners are not limited to the duties of the Human Relations Agency, however. They are the interface through which participants interact with community agencies, besides the agencies’ automated systems.
The captain and the limited partners they serve form a council of 10/ 11. The council meets at least quarterly and provides limited partners with a platform to interact and discuss common interest matters to their demographic within their branch.
A branch is made up of 4 such councils, which occupy the same apartment. A branch comprises around 40 limited partners and their dependents. The four captains who serve the branch make up a branch presidency.
10 branches form a village. Each of the branch presidencies that serves a branch also belongs to a branch board. Branch boards provide an additional check and balance for captains and branch presidencies. Branches are numbered based on the village’s hub, in the direction of the breezeway one-way traffic direction.
A branch’s number determines with whom its presidency will form a branch board. Branch presidencies 1, 2, and 3 form one branch board, as do 4, 5, and 6, and 7, 8, and 9.
Four villages make a district. The last branch presidency in each village in the community (branch presidency 10) combines with three others in their district or cluster of 3 districts to form additional branch boards. The last branch presidencies in villages 1, 2, and 3 in each district make a board. The last branch presidencies in village 4 of each of the 3 districts in a cluster also form a board.
This can be illustrated as follows:
Besides belonging to a branch presidency and a board, every captain belongs to a demographic presidency of 3. A demographic presidency is made up of 3 captains within a board, and who serve the same demographic. The demographic presidency mainly serves an advisory function, safeguarding issues common to the particular demographic, and helping in mentorship and support for incoming captains.
The automated system is designed to help participants with all the help they need in accounting. However, should they run into problems, captains assist them navigate the system, or direct them to relevant contractors who help them at a fee.
The Accounting Agency uses an automated system to deliver on its mandate. The system provides the tools needed to keep accounting information, and an opportunity to train participants and community public servants. If a participant has an issue using the system, they can hire a contractor, though it is envisaged that with sufficient training and regular adjustment to accommodate users’ needs, this will be a rare occurrence.
The automated system employs accounting process and robotic process automation. Accounting process automation refers to the automation of accounting processes such as settling accounts payable, preparing financial reports such as balance sheets and profit and loss accounts, and information sharing. Through APA, manual intervention and the use of spreadsheets to record and synthesize information are minimized, and in many cases, eliminated.
Robotic process automation refers to the use of robotic systems to carry out simple, repetitive tasks such as keying in transaction details. The automation form uses programmable bots to centralize information, such that a simple transaction is immediately analyzed in financial terms and shared with relevant platforms that the business uses.
Besides helping in accounting processes, the automated system also plays a critical role in training. Training modules are uploaded by contractors, after which the system, by observing what each participant needs, prescribes the necessary training for them. This involves the use of machine learning and AI, as well as cloud computing to identify trends, analyze huge amounts of information, and design the best training approach and material for each user.
The Accounting Agency registers qualified accountants to work as contractors in the community. Contractors provide specialized services to participants at a fee. The services involve helping their clients to navigate the system and consultancy. Through the agency’s registration and accreditation system, participants and contractors can easily connect. Before registration, the agency establishes a contractor’s qualification, specialization, experience, and other relevant details. These make it easier for participants to locate the contractor they need when the need arises.
With the help of the automated system, the community needs 2 accountants per village, which has 400 businesses. This translates to around 200 accountants in the community. Operational presidencies interact extensively with the contractors in an attempt to streamline their operations and identify areas of the automated system that can be improved. Each of the 24 operational presidencies who serves a district interacts with 8 contractors. Since the operational presidencies also serve the Data and Publishing and QHSE Agencies, they also interact with contractors in these agencies in the same fashion as they do with accountants.
The 24 community agencies form three columns, of 8 agencies each. The Accounting Agency is part of the first column. While agencies in a column do not enjoy the same level of collaboration as the three agencies in a bureau, they work together on a few areas of common interest. For the Accounting Agency, there is close coordination with the Business Planning Agency (agency 19). businesses evaluate different business plans based on the financial information available. The Accounting Agency also works with the IP Agency as participants work to commercialize their innovations. The Accounting Agency provides the necessary financial analysis and data to determine whether the investment in research and development will be worth what the IP may make once produced.
The Accounting Agency collaborates with the Community Bank (agency 7) as it works to process transactions into financial statements and reports. The agency also works with the Agricultural Land and Surrounding Areas Agency (agency 22) in assets’ financial management.
Roles of the Accounting Agency
- Facilitating financial reporting
- Developing and monitoring the application of accounting standards and guidelines
- Training on accounting processes
- Registration of accounting contractors
Facilitating financial reporting
Businesses and community agencies need to maintain proper books of accounts, to enable them to plan, budget, and meet obligations such as taxation properly. Accounting information that they prepare should be complete, accurate, easy to understand, and objective. The Accounting Agency is concerned with enabling businesses and community agencies to achieve these goals, and in the process, improve their business performance and their understanding of accounting processes.
The Accounting Agency provides businesses with accounting systems that enable proper financial reporting. The accounting systems are designed to be integrated with other agencies’ systems, including audit and banking agencies, to enable a seamless transfer of information and accuracy in reporting. Such integration also helps agencies and businesses as they make decisions, with accurate information at hand.
Accounting standards and guidelines
In contemporary accounting practice, Generally Accepted Accounting Principles (GAAP) are important as they help businesses assign transactions properly, and simplify bookkeeping. GAAPs are particularly important because they ensure the consistency, clarity, and continuity of financial reports. Books of accounts prepared with the same guidelines are easily comparable. Through GAAPs, business owners can easily evaluate possible strategic options, since they have a complete picture of a business’s state.
In the community, accounting books will be markedly different from the way accounting is done in modern businesses. For instance, businesses will not have any assets, besides the cash they have at the bank, and the business itself. This and other unique community features will necessitate the drawing up of principles to complement those already used by accountants today, with a view of standardizing accounting practice while accommodating special business features in NewVistas.
The Accounting Agency will facilitate the formulation and implementation of these standards, by providing a platform on which accountants can come together and deliberate. The agency will, through its system, ensure that these principles are followed and that they are consistent with the law, bylaws, and accounting practice in the area within which a community operates.
Every business owner needs to have at least some basic understanding of accounting. This helps them in understanding the health of their business, operational inefficiencies, and their obligations concerning taxes, licenses, and regulator fees, among others.
The Accounting Agency runs automated training sessions for all business owners to ensure they are competent enough to read financial reports and make good conclusions from them. The agency develops these sessions with the help of contractors. They are made simple to understand and advance in sophistication as a business owner becomes more familiar with accounting.
Registration and accreditation
Contractors who work as accountants are accredited and registered by the Accounting Agency. Through registration, the Accounting Agency also provides avenues through which professionals can network. Networking helps create strong professional relationships and business opportunities, education, and mentorship. Registered accountants can come together and collaborate on professional conferences that discuss industry best practice and research. Registration also means that participants can more easily access services when needed.
As stated elsewhere on this page, the Accounting Agency’s system and other aspects of the community’s economic setup minimize the need for many accountants as compared to contemporary practice. The registration process manages the number of contractors who are registered to work as accountants. It also provides a means of monitoring whether contractors are operating effectively to serve participants and grow their expertise. The agency, through operational presidencies, helps them in instances where this is not the case.
Presidencies’ offices, meetings, and quarterly conferences
The Accounting Agency’s executive presidency has its offices on building 16’s western side. On the eastern side, the trustee and the Regulatory Bureau’s operational presidencies that serve the Accounting Agency, as well as District 16, have their offices.
Trustees and the regulatory operational presidencies alternate their offices. Trustees have the offices in building 16 on Tuesdays and Thursdays, while the operational presidencies use the offices on Mondays and Wednesdays, as shown in this timetable:
|Building 4/ Health and Nutrition Agency||Building 16/ Accounting Agency|
|Monday||Trustee presidency||Regulatory Bureau Operational presidency|
|Tuesday||Regulatory Bureau Operational presidency||Trustee presidency|
|Wednesday||Trustee presidency||Regulatory Bureau Operational presidency|
|Thursday||Regulatory Bureau Operational presidency||Trustee presidency|
The Data Bureau’s operational presidencies have offices on the first floor of every district building, with each of the 24 presidencies occupying offices in one building. This graphic shows district building 16’s first-floor layout, with offices for the executive presidency, trustees, and various operational presidencies indicated.
Working hours and meetings
Community public servants, including the Accounting Agency’s executive presidency and the Regulatory Bureau’s operational presidencies, work from Monday to Thursday, from 8:00 to 8:45 in the morning. This time is dedicated to meeting clients and normal operational duties as the office requires. On Thursday, the whole presidency (four presidents serving A, B, C, and D) meets for a 45-minute meeting from 9:00 to 9:45 in the morning.
On the last Friday of each quarter, between 9:00 AM and 12:00 PM, each demographic presidency meets. The three-member presidency discusses common bureau matters that are of interest to the demographic they serve. On Saturday, again between 9:00 AM and 12:00 PM, the whole board meets, where the presidents present their input from the previous day’s demographic presidency meeting, and prepare for the quarterly conference. The aim is to have a cohesive presentation during the quarterly conference but tailored to specific demographic interests.
Quarterly conferences are held on the last Sunday of each quarter, from 9:00 AM to 3:00 PM, with a lunch break in between. During quarterly conferences, each demographic presidency sits together in the same row.
Quarterly conferences are held in District Buildings 5 and 17. Each building has a lower and higher assembly court. The different demographic groups use the assembly courts as follows:
|5||Lower court||Married men (A)|
|5||Higher court||Married Women (B)|
|17||Lower court||Single women (C)|
|17||Higher court||Single men (D)|
Each of the four assembly courts has seats for 480 presidents representing the respective demographic. In the diagram below each of the 4 courts is illustrated. The ceiling of each court has an elliptical arch that enables executive presidents, who are the only ones who make a presentation during the conference, to speak without the need of amplifying their voice. The 480 seats are easily rotatable to enable presidents to face whoever is speaking. Each of the four courts has an identical arrangement and number of seats. The exact arrangement of each court can therefore be illustrated using one court, in this case, building 5’s lower court that is used by married men (A).
Within an assembly court, the 480 presidents are arranged in terms of demographic presidencies of 3. The Data Bureau’s demographic presidency for married men (16A, 17A, and 18A) sits as highlighted in the graphic below.
The 24 Regulatory Bureau’s operational presidents for married men (A) are organized into 8 demographic presidencies: 1,2, 3/ 4, 5, 6/ 7, 8, 9/ 10, 11, 12/13,14,15/ 16,17,18/ 19,20,21/ and 22,23,24.
Some additional notes/definitions from an earlier version of this page:
- Among other factors, an entity’s financial performance and efficiency is tied to its financial reporting. This is especially so when the accounting function is not just an archiver of historical records, but takes an active role in planning. In the community, the Accounting Agency will be enable the community infrastructure perform at full capacity (Chen, F., et al. “Financial Reporting Quality and Investment Efficiency of Private Firms in Emerging Markets.” Accounting Review, Forthcoming (2010): electronic.).
- Studies have shown that online training can, when conducted properly, have greater rewards than in-person training. It saves time and resources, and due to the flexibility allowed, can result in better outcomes for the trainees. This will augur well for the Accounting Agency, which has neither the time and other resources required for in-person training, nor the organizational capacity to execute it (Sandlin, C. “An Analysis of Online Training: Effectiveness, Efficiency, and Implementation Methods in a Corporate Environment.” East Tenessee University (thesis) (2013): 1-26. electronic.).
- In contemporary organizations, the bottom-line (net profit/earnings/surplus) can be enhanced through reduced wastage, expenses and other factors. This means that the more efficient an organization is, the more its bottom-line will grow (Lean-CPA. Efficiency helps the bottomline. 2019. 01 06 2019.).
- Through sound financial reporting practices, accounting departments and entities help organizations build up, and benefit from, “reputational capital.” The community is build on among other things, the integrity of its systems, and the ability of its structures to prevent fraud and misrepresentation, which could severely impair judgement. The Accounting Agency’s work will help in actualizing this (Jackson, K. Building Reputational Capital: Strategies for Integrity and Fair Play that Improve the Bottom-line. Oxford: Oxford University Press, 2004.)
- Financial ratios are used to examine and compare an organization’s financial structure, health, and to provide a more general, yet detailed report on the entity’s performance. The use of ratios in the community will detail both the community economy’s performance, while also detailing the community agencies’ actual financial performance (Adedeji, E. “A Tool for Measuring Organization Performance using Ratio Analysis.” 4.19 (2014): 16-22.).
- Businesses, especially small enterprises, highly value business advice given by accountants, with a survey revealing that up to 78% of American small business regard accountants as the primary and most trusted source of business advice. The ability to advice is based on accountants understanding of what financial reporting trends and performance indicators mean, and what can be done to improve business performance through sound financial management. The Accounting Agency will be operating in an economy where virtually every business is a small business, in need of accounting advice, which might be impractical to have in-house (Accounting-Today. A small-business barometer for 2019. 06 11 2018. 02 06 2019.).
- Technology is also greatly affecting the way accounting is done in organizations. Powered by blockchain and AI, accounting tools are more advanced, giving businesses better information to make decisions. In the community, participants will need to update themselves on such changes, which could greatly help their understanding of accounting, and harness its power to drive business growth (Tysiac, K. and J. Drew. “Accounting firms: The next generation.” Journal of Accounting (2018): published online.).
- Within the community, the Accounting Agency will be tasked with formulating accounting standards and practice guidelines that help enhance business growth, as well as the accuracy, completeness and reliability of reports. Standards will also provide the community with a standardized financial reporting platform, enabling other community agencies and businesses better interpret the information (Beke, J. International Accounting Standardization. Oxford: Chartridge Books, 2014.)
- Once the standards have been developed, they must then be harmonized with existing GAAPs and FRS, among other standards. This is because financial reports are not for intra-community consumption only, but are also used outside the community, and need to be standardized (HLS. Harmonization of GAAP and IFRS. 27 02 2008. 01 06 2019.).
- With the help of business owners, the Accounting Agency will identify areas which require standards that work for the community. These standards and practices will then be derived, with rigorous examination to ensure that define them and what benefit they give business owners and the community as a whole (FASB. Standard-setting process. 2019. 01 06 2019.)
- Handlers of financial information have a duty to keep such information confidential, especially when it relates to third parties. Disclosure should be backed either by consent of the owner of the information, or under legal instructions to do so (LII. 12 U.S. Code § 3403. Confidentiality of financial records. 2019. 02 06 2019.).
- One of the main reasons why innovations fail is lack of financial planning, coupled with an overconfident innovator who expects instant financial success. The Accounting Agency can help the innovator in better financial planning, in collaboration with other agencies, and give the proposed IP a reality check (Levine, A. Why Innovation Fails. Albany: State University of New York Press, 1980.)