Book-Keeping Ethics and its Function in The Decision Making Process: Nokia And Samsung

Learning bookkeeping ethics is not only important for students of Accounting, Finance or Commerce, but it is an equally critical part of every business organization. A bookkeeper has to meet well-defined objectives and keep track of financial transactions.

From working on a firm’s taxation fundamentals to maintaining and monitoring payrolls, he/she has lots of critical responsibilities to execute.

Now that we are talking about the bookkeeping ethics and its function in the decision-making process of Nokia and Samsung, let's delve into the individual bookkeeping structure of each of these leading corporate houses and figure out all essential points that define the structure and functionality of these firms.

Bookkeeping Ethics and Its Significance in the Decision Making Process of Nokia

Nokia Corporation is one of the world’s leading mobile phone manufacturers based in Finland. The company caters to130 countries. As a matter of fact, the name Nokia has been derived from the river “Nokia” in Finland, which apparently is the home country of the company. Let’s know about the various aspects of bookkeeping ethics associated with the firm.

Taxation: Nokia deducts withholding tax on dividends according to the mandatory Finnish tax rules and regulations. The usual withholding rate is 30%. Non-residents having a limited tax liability in the country can enjoy the benefit of partial or full tax exemption of the withholding amount, based on the tax treaty between the county of tax residency of the recipient and Finland.

Payroll policy: According to the compensation or payroll policy of Nokia, the directors’ remuneration includes an annual fee with no other fees paid for meeting attendance. Approximately 40% of the director’s remuneration is said to be paid via Nokia shares which are purchased from the market.

The payroll or the compensation structure of this company is divided into seven parts; base salary, short-term incentive, long-term incentive, benefits and prerequisites, relocation and mobility, retirement plans and change of control arrangements. The President and CEO of the company are required to hold at least 3 times their basic salary in Nokia shares in order to align with the shareholders in the long run.

Bookkeeping Ethics and Its Significance in the Decision Making Process of Samsung

The Samsung group is a conglomerate based in South-Korea and includes a number of subsidiaries. It is said to be one of the largest businesses in Korea, producing around one-fifth of the country’s net exports. However, the primary focus of the brand is mainly in electronics, defense industry, and constructions. Now that you have developed a brief idea about the company’s history, let’s take a further look at the bookkeeping ethics of the company.

Samsung Electronic follows the Global Code of Conduct and Ethics. The firm also provides a channel to report instances related to the violation of the ethical standards as set by the business.

Talking of the bookkeeping ethics followed by Samsung, it is to be mentioned that the company has reportedly vowed to pay compensation for ill workers by the year 2028. Samsung has decided to compensate its local chip and display factory employees who have suffered illnesses related to work. Talking of accounting and market share of this company, it is to be noted that the world market share of Samsung’s LCD monitor is 18% DRAM 49.6%, NAND Flash 42.6%, Mobile phones 34% and Digital cameras 11.8%.

Apparently, there’s an issue with the account management system of Samsung. The company failed to comply with the Generally Accepted Accounting Principles (GAAP). In addition, Samsung has also faced limitations and issues concerning the cost structure related to management accounting.

Nokia and Samsung: The Significance of Bookkeeping Ethics in the Decision-Making Process

When it comes to the significance of bookkeeping ethics in the decision making of Samsung and Nokia, it is to be noted that both the companies are progressive and experimental in their own ways.

While the concrete taxation structure and payroll policy of Nokia can help its employees enjoy well-defined compensation structure and taxation ideas, the helpful move made by Samsung with regard to compensating its ill employees by the year 2028 can help and inspire the firm to make more of such effective and significant decisions for its workers in the near future.

However, the issue concerning the company’s inability to comply with the Generally Accepted Accounting Principles might prove to be a setback, if stricter and careful steps are not taken to carry out all corporate responsibilities ethically.

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