Contemporary Issues in Accounting

Accounting Overview

Business persons like to understand accounting principles so they can ensure that, their finance and material are properly tracked and managed. Alike cost principle, matching principle, monetary assumption and materiality. That principles and Accounting standards are used for tackling business problems and provide their solutions. For more understanding here accounting defines as.

"Accounting is the artwork of documenting, classifying and summarizing resources and expenditures and incentives in gigantic words, which, in at least one part, have an economic essence and which decodes the final outcome thereof" (Riahi-Belkaoui, 2004 p.38).

How Accounting Regulations Increases & His Reasons

As politics and ethnicity affect accounting professionals and their customers, marked gaps in regulations around the world are expected to intensify in 2020. The stress of complex and ever-changing legislation released at regional and international levels can indeed be felt by many companies with global interests. But in 2020, In Australia, calls for even more legislation of finance and tax "equality" are the, particularly in regards to regulating digital companies.

There is a significant political momentum in Australia to counter transnational corporations' alleged tax evasion by new legislation, improved reporting and enhanced accountability initiatives.

Australia also begun to introduce, in lieu of other OECD nations, new BEPS based tax initiatives. It is extremely possible that in the next 12 months, unique tax initiatives for organizations working in the digital space would be imposed in Australia by new regulations. “Nurunnabi, M. (2014). ‘Does accounting regulation matter?”

A money laundering crackdown is also ongoing and could be convenient to enforce. By 10 January 2020, the latest EU Money Laundering Directive must also be transcribed into national legislation by the member countries, but it is already considered legally effective throughout the EU. In order to improve openness in Europe, step is also being taken. By 10 March 2021, state accountability registers are to be networked Europe-wide through a single European portal.

Role of Accountancy Firm for Its Clients

The legislation of specific accounting professionals is undertaken mainly at the national scale, with accounting professional associations having an essential role in collaborating with authorities to ensure that such legislation is efficient, effective and even in the interest of the public. Accounting practitioners are also expected to keep up-to - date with notifications from appropriate regulatory authorities, including the Securities and Exchange Commission in Australia, the Financial Reporting Council in Australia and their adherents.

“Rahman, A., Perera, H., & Ganesh, S. (2002).”

Global Economics Forecast:

At the worldwide platform, analysts expect that in the coming years, enhanced regulation will impact all accounting profession. The Association of Chartered Professional Accountants (ACCA) reports that enhanced regulation and better governance would have the strongest effect on the profession in the years to 2025 in a study on the future of accountancy entitled 'Drivers of Change and Future Skills'.

Inevitable Change:

Researcher Muhammed Azizul Islam, Associate Professor at the QUT School of Accounting in Brisbane , Australia, says in an article issued by the international Federation of Accountants ( IFAC) back in 2017 that "excessive regulation is inevitable due to major tax evasion, transfer pricing, and money laundering as revealed through the Panama papers."

Regulations Influences on Accounting Firms and His Outcomes for Companies

As per the Global Regulation Report, an IFAC study of 313 accounting, finance, and business practitioners on 6 continents, legislation is becoming extremely complicated and affects the prospects of organizations to grow and develop.

For the equality, efficiency, and effectiveness of economic systems, good regulation is important, so making things happen as well as it can is a never-ending task. Growth continues to be a global concern, but these outcomes should really be a wake-up call for us to analyze the regulatory effect, including the regulatory and reform initiatives implemented in result of the global financial crisis.

“Parker, R. H., & Morris, R. D. (2001)”

Growth and Innovation

In a study said legislation have a major or very important effect on the opportunities for their entities to expand and innovate.

  • There is no question that [Regulation] has its position, but it must be realistic and take account of the specific 'risk' profiling of organizations.'
  • Regulation would eventually kill the ethos of first-world entrepreneurialism. There ought to be less legislation, but more values focused on business and business leaders' transparency.

Complexity and Risk

It is more commonly noted that regulations impacting the organization in complex or very complex way.

  • The issue is that legislators are government, non-profit, and business micromanagers.
  • We frequently feel that legislation ignore main risk areas and concentrate on over-regulated areas.
  • The more detrimental consequences of 'control without transparency' are becoming more and more evident, more and more visible, as the influence of control expands and grows. It is indeed time to change that.

Consistency and Collaboration

It is also noticed that Cooperation among regulators is unsuccessful, and a third said they noticed that the regulatory approach in various regions was contradictory or quite inconsistent.

  • There are cases in which local governments have a set of rules and regulations that enforce global regulations separately.
  • To have a more coherent and compatible structure, we need to examine the legislative framework. At present, the strategy is sometimes ad hoc in nature and often conflicting.
  • More productive collaboration to insure that alternate voices will be heard.

Looking Ahead

Over the next five years, the effect of legislation will begin to become even more or much more important.

  • Our field is now extremely over-regulated and policymakers seem quite unsatisfied. In the coming years, I fear that the field will face even further regulation.
  • In policy, there tends to be further duplication, with norm keepers struggling to coordinate policies and procedures amid an overall effort by government to eliminate red tape.

Conclusion on Accounting Measurement Policies

This has shown that in reaction to a variety of variables, regulation evolves. Most of the other critical ones have been discussed here, such as sustainable growth, 'borrowed' law, colonization and imperialism, and economic supremacy. As a result, accounting laws in different countries have grown differently.

References for Accounting Measurement Policies

Riahi-Belkaoui, A. (2004). Accounting theory. Cengage Learning EMEA.

Nurunnabi, M. (2014). ‘Does accounting regulation matter?’: An experience of international financial reporting standards implementation in an emerging country. Research in Accounting Regulation, 26(2), 230-238.

Rahman, A., Perera, H., & Ganesh, S. (2002). Accounting practice harmony, accounting regulation and firm characteristics. Abacus, 38(1), 46-77.

Parker, R. H., & Morris, R. D. (2001). The influence of US GAAP on the harmony of accounting measurement policies of large companies in the UK and Australia. Abacus, 37(3), 297-328.

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