Once, I was asked in one of the
interview, which is more important between costing and financial accounting.
This is a quite difficult question, but considering that the post is for
property investment, my answer should be it is costing that is more important
than financial accounting, with the reason that costing is the essence of
financial accounting and it provides the starting point for financial
accounting. Yes, costing is the starting point which gives the first step and
figures for the next financial accounting move.
But, it real life, they are equally
important. They are dependent to each other. Costing serve as the starting
point for financial accounting, but without financial accounting, it is
meaningless. Financial accounting serve as the recording for costing and thus
provide a medium of next valuation for decision making of both transaction of “underspend”
or “overspend”. A wrong recording would give
a false alarm and wrong decision making. This ultimately will give a false
valuation for the organization particularly in managing profitability and next
resulted a wrong decision making in other area such as investment, strategy
formulation and not to forgotten, statutory reporting and taxation.
So, which one is more important? It would
depends to the situation, but for me personally, they are equally important and
play a different roles in complement each other.
