Summary Blog :)

http://www.timesonline.co.uk/tol/news/world/us_and_americas/article5898195.ece

Summary:

In the past, the Great Depression has left many with nothing and was forced to live in very rough shelters. Now with the job losses and house repossessions, it has made Americans repeat history. 300 people are now living along the riverbank stretching over a couple of miles, with only tents as their “home”. Many are forced to sell their possessions, just to keep living barely. Unemployment in Sacramento has reached 10.4% in January, and with this sudden amount of people losing their homes, charity workers cannot cope with the number of people that are in need of help. The reason why there is such a large amount of people going unemployed is because with the economy in such bad condition, it is also affecting new layer of middle class earners. People who are earning a good amount of money but did not think about saving their money are now finding themselves at the edge of being homeless with the inconsistency of their pay cheques.



Connection:

In this kind of situation, we can’t honestly say that this has not even a single thing to do with accounting. With the amount of people going unemployed, then that means the wages expense for big company would decrease by far. Indeed this would be the way to cut down on expenses of a company, but at the same time, this would mean less people are willing to spend the money on lifestyle themed companies. Such as toy factories, or electronics companies, they won’t be able to sell a lot of goods, which leads them into bankruptcy. Resulting in even more people unemployed and the cycle repeats. As lifestyle companies loses the publics attention, it means the prices would drop, and then the whole accounting system would not require as much complexity. With this said, people would pay even more attention to the accounting frauds and that would, in a way, make it easier to prevent accounting frauds. But never the less the more people that go unemployed, the more it affects the accounting side of the world.


Reflection:
The above that I’ve said were just some that were on the top of my head that I believe would affect the accounting side of things. There are even tons more that affect accounting, in small and big ways. But with the way it's progressing right now, the whole accounting system would be corrupted, as everyone would eventually start to turn to each other and suspect each other for other things and then the "honesty" that accountants should have would be gone. That itself already defeats the purpose of accounting, and the way it works. In conclusion we could almost say that this depression affects accounting even more than the previous ones since people did not rely on machines that keep records of it, and accounting was not as advance as it is now. So with this in mind we can definitely say, that depression is definitely a bad thing, at least when accounting has evolved so much and has become the way it is now.