Assignment: For each thread, students must support their assertions with at least 1 scholarly citation in APA format and at least one Bible verse. The integration of the Bible verse and the discussion content should be evident. Each reply must incorporate at least 1 scholarly citation in APA format. Any sources cited must have been published within the last five years. Acceptable sources include the textbook and scholarly sources from the Library's databases.
Stephen
Part One:
Market forces strongly influence the supply of financial accounting information by creating demand for transparency and accountability. First, debt and equity financial markets rely on financial disclosures to evaluate firms' performance, risk, and value. Investors and creditors require reliable reporting to make informed decisions. As Revsine et al. (2023) explain, capital markets are built on information symmetry, and financial reporting reduces uncertainty, thereby lowering the cost of capital.
Second, the managerial labor market creates incentives for accurate reporting, as managers are often evaluated based on financial performance. Compensation contracts, including stock options or bonuses, directly tie reporting outcomes to personal rewards. Even at lower levels, employees are often incentivesed for generating additional revenue for the company. This system can align managerial incentives with shareholder interests but may also encourage earnings management. Thus, stakeholders demand robust accounting systems to ensure fairness and accountability.
Lastly, the market for corporate control, including mergers, acquisitions, and takeovers, relies heavily on transparent reporting to assess firm value. Inaccurate disclosures can distort valuations, derail transactions, and damage trust. This pressure reinforces the need for ethical, consistent financial reporting.
Beyond these markets, regulatory oversight also shapes the supply of financial accounting information. Organizations such as the SEC and FASB establish reporting standards that firms must follow, ensuring comparability and reliability across industries. These regulations not only protect investors but also enhance the credibility of financial disclosures. As Revsine et al. (2023) point out, when managers supply consistent and verifiable information, it reduces information asymmetry and strengthens confidence in the financial system. In this way, regulation complements market forces by ensuring that accounting information serves the needs of a wide range of stakeholders. Need Assignment Help?
Part Two:
The Bible also demonstrates the value of accountability in financial stewardship. In 2 Kings 12:15 (RSV-CE) it states: "And they did not ask for an accounting from the men into whose hand they delivered the money to pay out to the workmen, for they dealt honestly." Here, honesty and integrity made formal accounting unnecessary. Yet the broader passage through 2 Kings 22:7 highlights that transparency safeguards against abuse. Even when trust exists, systems of accountability reinforce stewardship and deter fraud.
In modern practice, this principle mirrors the role of audits and disclosures. While honesty is foundational, structured reporting ensures resources are used appropriately and protects against temptation or error. As financial reporting serves markets and stakeholders, it also fulfills a biblical call to integrity, demonstrating that truthfulness in accounting is both a professional and spiritual responsibility.
References:
De George, E. T., & Shivakumar, L. (2016). A review of the IFRS adoption literature. Review of Accounting Studies, 21(3), 898-1004.
Revsine, L., Collins, D., Johnson, B., Mittelstaedt, F., & Soffer, L. (2023). Financial reporting and analysis (8th ed.). McGraw Hill.
The Holy Bible, Revised Standard Version Catholic Edition. (2006). San Francisco: Ignatius Press.
Neethi
Financial Accounting Information
Financial accounting information is used to make various key decisions such as those which relates to investment, financial, accounting, and operational decisions. Hence, the quality of these strategic decisions depends on the quality of the underlying financial information. It is in the best interest of the company to provide and maintain transparent, reliable, comparable and detailed financial accounting information that can facilitate efficient and timely decision making (Rotaru et al., 2022).
Debt and equity financial markets have a strong influence on the supply of financial accounting information. A company heavily relies on debt and equity financial markets for their funding needs, and the financial accounting information is thoroughly studied by a potential investor/lender before such funding decisions are made. According to Wang (2024), high quality accounting information can minimize information asymmetry and encourage foreign investment. A potential investor or debt lender uses financial accounting information to analyze the company's historical financial performance, growth prospect, profit margins, financial position, their ability to generate robust and sustainable cash flow through different activities and to meet their long-term obligations. For example, an investor is more than likely to review a company's income statement to see if revenues have been growing over the years, and if profit margins are healthy and improving. This demonstrates that the company is managing resources effectively and enhancing its profit-generating capacity. Hence, it is in the advantage for a company to supply comprehensive financial accounting information, so they have a good chance of securing capital at terms that are favorable and attractive to them.
Similarly, the managerial labor market also significantly influences the supply of financial accounting information. One of the biggest assets for a company is its employees and in today's competitive market it is very hard to attract and retain talented managers and employees. A company's financial accounting information helps a prospective manager understand the current financial standing of the company and this can help in making informed decisions on future career trajectory. Managers' compensation is also often linked to performance incentives, for example, increasing profitability, managing costs, etc., as this helps in aligning the interests of managers with those of shareholders. Financial statement elements such as revenue, profit, stock price, etc. are crucial performance indicators that determine short-term incentives like annual bonus as well as long-term incentives such as stock options in the company. However, some executives may try to manipulate the financial statements to earn higher bonus which are directly linked to revenue objectives (Revsine et al., 2021).
The market of corporate control is also influenced by the supply of financial accounting information. Companies that are looking for potential merger or acquisition of a target company rely heavily on the financial statements to determine if the target company is worth the acquisition or merger decision. For example, a steady or accelerating growth indicates a strong business which will help the acquirer expand its market share and customer base. This also enables the acquirer to determine a fair value for the transaction of acquiring control.
While reading 2 Kings 12-22, we see that the scripture emphasizes the theme of financial accountability through temple repairs funded by the offerings. 2 Kings chapter 12 highlights the process of how funds were collected and different workers with different levels of authority and responsibility handled the funds and were trusted to put those in good use to repair the temple. However, when Sennacherib, King of Assyria attacked King Hezekiah's fourteenth year of reign, Hezekiah stripped off the gold that covered the doors and doorposts of the temple and gave it to the King of Assyria for his withdrawal and appeasement (Good News Translation Bible, 1992, 2 Kings 18:13-16). The scripture highlights the importance of purpose-driven use of resources that should be allocated strictly for their intended use, in this case for temple repairs. Leaders must use moral conviction in making decisions and avoid using funds for their personal gain. To avoid potential fraud, it is key to maintain transparent financial accounting processes and while delegating resource management functions to honest and responsible individuals is necessary, regular audits and assertions are essential to boost investor confidence and increase accountability.
References:
Good News Bible. (1992). Good News Bible Online. (Original work published 1966)
Revsine, L., Mittelstaedt, F., Johnson, B., Soffer, L. C., & Collins, D. W. (2021). Financial Reporting & Analysis. McGraw-Hill Education.
Rotaru, D., Mihaila, S., Codrean, V., & Academy of Economic Studies of Moldova. (2022). the role of financial-accountinginformationin the decision-making process. Journal of Social Sciences (Chisinau) (Online), 5(2), 155-163.
Wang, Y. (2024). Financial statements analysis on pfizer. SHS Web of Conferences, 181, 2023.