Explain the major advantages and disadvantages of a business owner with minimal accounting experience maintaining the company's books instead of hiring an accountant. Discuss the major impact to the users of accounting statements if the statements are prepared in error. Provide support for your position.
An accounting system is an important part of a business. Without a definitive system in place, a business cannot keep track of what it owns, to whom it owes money and any outstanding accounts from its customers.The major advantage of maintaining company's books is that there will be no chances of frauds.There will be no misuse of cash.There will be no favouritism and nepotism.Decision making becomes easier because you know the exact financial position of the company.Disadvantages are that there will be chances of errors in posting and journalizing the day to day transactions because ypu have less experience in the field of accounting.Due to this the financial statements will provide the wrong information to the users of the accounting statments.This becomes a hurdle in taking a good decision on time.