Discuss the impact of accounting on the information environment, the firm’s production decisions, and the impact on managerial incentives.

Bookkeeping, the recording of primarily historical financial transactions, is a key activityassociated with accountants. To casual readers this conveys an impression of accountants merelywriting things on “paper” and then perhaps shuffling numbers pertaining to past events. Asexamples, a financial accountant can use accruals to vary when expenses are recorded (saythrough depreciation choices) or a managerial accountant may opt to allocate more of an alreadyincurred common cost to a particular division. In each case, the “total” is kept unchanged – moredepreciation early means less later and higher allocation to one division means less allocation foranother, leaving aggregate firm profits unchanged. Does this mean accounting has no “real”implications as far as firm profits are concerned? Here, think of and discuss impact of accountingon the information environment, the firm’s production decisions, and the impact on managerialincentives. The submission should include the question, followed by your answer.Appropriate footnotes should be included that cite any references to published material.