AbitibiBowater to suspends at several plants, affects 1,500 jobs in Canada

AntibiBowater to suspends at several plants, affects 1,500 jobs in Canada.
http://ca.news.finance.yahoo.com/s/17092009/2/biz-finance-antibibowater-suspends-at-several-plants-affects-1-500-jobs.html/

Summary:
A Montreal-based company, Antibibowater,has to stop its production at several facilities due to its financial problems. aside from stopping production, as much as 1500 jobs will be affected due to the outcome of this decision. The reason for this decision is the lessening demand for newsprint. A spokeman for the company said that the demand for newsprint has dropped as much as 30% within a year. Along with many forestry industries in Canada, AntibiBowater has been greatly affected during the recession. An attempt to restructure the company would be difficult since AntibiBowater is operating with little profit while carrying a huge debt load.

Connection:
This article links with accounting because it is possible that a bad accounting system was a factor leading them to bankruptcy. If Antibibowater have a good accounting system, they might have been able to detect a financial crisis sooner which would have allowed them to take precautionary steps sooner. Good Accounting practice is important for a company because it helps determine how well a company is doing at a given point in time. So if Antibibowater knew that they were suffering from financial problems sooner, they might have been able to take steps to avoid bankruptcy.

Reflection:
I think aside from accouting practices, the economy also play a role in affecting Antibibowater's financial state. If the economy is doing bad, it might not have been a bad accounting system that led Antibibowater to bankrupty but I still believe that good accounting practices are important to every company. This article made me realize how useful accounting is in helping a company determine its successfulness and also helping them figure out if they are in need of external help and if they are in risk of having financial problems. In conclusion, accounting is an important system that determines and decides how a company should run and if they are in need of acquiring more assets.