Introduction and Purpose
In today’s developing industry a concern often arises is how individuals react or behaved when they were provided with various information or disclosure that impacts the business processes, opinions, and other variables have on the value of the overall firm. Behavioural research in accounting is a study come from psychology, economics and statistics roots that see how individuals make decisions when they were provided with various accounting information or disclosure.
Since the beginning of 2005 many countries have adopt accounting standards issued by International Accounting Standards Board (IASB) and according to PricewaterhouseCoopers (PWC 2014) as of July 2014 there are 283 countries have adopted IFRS. Through
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Over the past few years many analysts reveals that there’s a relation between individual behaviour affecting the usage of international accounting in many countries. Alon and Dweyer (2012, pp. 142-160) identified there’s a connection between the use of international accounting with individuals behaviour in the case of Gazprom and PwC in Russia.
After post-Soviet era Russia going through significant market reforms. As the institutional structures were being revised, the development of accounting and auditing was placed. Auditing was seen as a way to attract foreign capital, modernize the economy and obtain loans from IMF and the World Bank. Mennicken (2008, pp. 384-403) found that while local auditing firm try to adopt international accounting standards, they found it difficult to transition from mechanical approach to a Western based audit style. Also it was reported that many individual users did not believe in financial statements unless certified by a western audit firm as the international audit firms work claimed to be ‘truer’ and better’ international that their Russian
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After the collapse of Enron and WorldCom, accounting standards and practices came under increased scrutiny. Many investors have lost trust in the financial reporting system and the accounting standards. A study done by Bailey and Sawers (2012, p. 25) examined whether principles-based standards will improve the quality of information in the market place. In their research, Bailey and Sawers (2012, p. 40) found that principles-based accounting standards alone did not affect the investment decisions of non-professional investors although it clearly allow more discretion than ruled-based standards. Non-professional investors chose to invest in the company regardless of the type of standard used in producing the financial
In order to ensure an organization’s financial order, auditors with international standards are a vital part. However, very few auditing companies exist in Afghanistan that can provide auditing services in compliance with international accounting standards. Fortunately, ACC is one of those few auditing firms that can confidently say that its auditing services are in the highe...
2a. The conceptual framework identifies the primary users of accounting information as investors, creditors, and those who advise them. It also assumes a “prudent” investor; that is, an investor who takes the time to become reasonably well informed with respect to accounting theory and practice. Discuss this concept with respect to the current economic environment. Are different groups of investors “prudent?”
Accounting is considered to be a Social and institutional practice, one which is constitutive and intrinsic to social relations (Hopwood, 1994, pg1). In case of (MA), internal users like managers are provided with (MA) information (Seal, 2009, pg4). This information focuses on both human performance and product services costs. It also gives the responsibility to managers to take measures according to the planning, directing and motivating and controlling of the business (Young, 2003, chapter5). Modern managerially-run enterprises was first established by Chandler in the United States between ‘1830 to 1860’(Chandler, 1977, pg3).It makes possible the world of oligopolies, which brings imperfect competition and misallocation of resources. It is...
...urvey of ethical behavior in the accounting profession. Journal of Accounting Research, 9 (2), pp. 287-306.
In the world of international finance there are two major accounting systems; GAAP, which stands for Generally Accepted Accounting Principles, and IFRS, which stands for International Financial Reporting Standards. The United States prefers GAAP while the European market, as well as many other countries, prefers IFRS. By 2015 the Securities Exchange Commission is anticipating a total transfer to IFRS in the United States. Though the differences between GAAP and IFRS are few, they could affect accuracy of financial reporting throughout the world. It is important to understand the differences and similarities between both GAAP and IFRS if one is to globalize ones market (Logue).
The US companies are not expected to fully approve IFRS or the IASB, since it eliminates their control over financial standards globally and IFRS has the accounting standards that are quite different from the US standards upon which many decisions in the country have been made. Though, the SEC try to converge both the Boards and the concepts, the disparities between the two imply that it may take few years to set up a standard accounting Board that the USA would approve.
So it appears that there would be some advantages for many aspects, such as accounting quality, when applying IFRS into various countries. Because IFRS would be able to exclude different options of accounting from national accounting standards which could reduce the divergence of management.[ Ahmed, A. S., Neel, M., & Wang, D. (2013). Does mandatory adoption of IFRS improve accounting quality? Preliminary evidence. Contemporary Accounting Research, 30(4), 1344-1372.](Ahmed, Neel & Wang, 2013) This change is likely to be more advantageous for more users, preparers and auditors to make their economic decisions. (Ramanna & Sletten, 2009)[ Ramanna, K., & Sletten, E. (2009). Why do countries adopt international financial reporting standards?. Harvard Business School Accounting & Management Unit Working Paper, (09-102).] Therefore, these expectations of changes would be beneficial for their local economic
Having a career in accounting, means having set rules and standards to follow by. In the accounting profession, GAAP has been well known and widely used more often in the U.S. Through out the world IFRS is being used except in the U.S. In the U.S., GAAP is a more common method for accounting. In this paper, I will analyze which form of accounting is preferable, from principle based (IFRS) vs. Rules based (GAAP). My research will conduct of the similarities and differences in the accounting field, between the two. Also, I will consider the benefits and disadvantages of using one method over the other.
As with other professional disciplines, understanding and upholding ethics is very important in the accounting field. Small-business investors and leaders consistently rely on the ethical collection and delivery of financial information, and are sometimes placed at risk if accounting ethics are not preserved. For a small-business owner, investor or manager, learning the basics of accounting ethics and their function is a good way to avoid legal and financial trouble. The professional accounting organizations establish codes of ethics and integrity standards that their me...
International Financial Reporting Standards (IFRS) is a set of accounting standards, rules, and principles established by an autonomous, non-profit organization called the International Accounting Standards Board (IASB). IFRS are standards issued to offer a common universal language for business activities, so accounts of the organization become comprehensible and comparable throughout international boundaries. These standards are essential for organizations that are dealings in numerous international locations. They are gradually being substituted for many different national accounting standards. These standards are the outcome or the result of the globalization of business and trade.
Businesses in United Arab Emirates operate at very advanced level. However, United Arab Emirates (UAE) lacks her own accounting standards. You find that most of the principles used in accounting and auditing results from the firms that carry out this practice in this country. It is therefore the mandate of these accounting/auditing firms to employ International Financial Reporting Standards (IFRS) in their operations to attain credibility. With most corporations being owned by both residents and non residents of UAE, application of the IFRS becomes very practical to everyone. The diversity in ownership of businesses in UAE gives every reason as to why audit is a fundamental tool that is being made use of in this country. The benefits accrued to this aspect are incredible and this paper endeavors to explore the auditing functions pegged in this culturally diverse business environment based in Dubai.
The globalization of business has resulted in the need for compatible accounting standards that can be used internationally for financial reporting. As a result, the International Financial Reporting Standards (IFRS) were developed by the International Accounting Standards Board (IASB) to unify the various financial reporting methods and create a single accounting standard which can be applied to any financial statement worldwide (Byatt). The global standardization of financial reporting will increase the readability and enhance comparability of globally traded companies’ financial statements, without the need of conversion or translation. There are a few main differences between the International Financial Reporting Standards (IFRS) and the U.S. Generally Accepted Accounting Principles (U.S GAAP). The increasing recognition and acceptance of the International Financial Reporting Standards by accounting professionals in the United States, will affect the way in which the U.S will record financial statements in the future.
The Corporate Law Economic Reform Program No 9 discussion paper, recommended that Australia adopt the International Financial Reporting Standards (IFRS) which commenced 1st January 2005. A key driver for this recommendation was realization that Australia was part of an increasingly global network. It was suggested that adoption of the IFRS would lead to “high quality, internationally accepted accounting standards which will facilitate cross border comparisons by investors”, (CLERP No.9 2003). A benefit of improved comparability of accounting information would be enhanced bilateral capital flows at a lower cost to Australian firms. This prompted much debate and expressed concerns in Australia with the IFRS introduction. Many of the concerns related to “a potential loss of autonomy and legitimacy in standard setting”, (Jones & Wolnizer 2003). They also suggest that “the perception that IFRS are of lower quality than local Australian standards”.
I have applied the IFRS to audit half-year income statement and statement of finical position from domestic sub-company or oversea branches. This allows me to understand the difficultly of dealing with accounting report form different nations. For example, we have to negotiate each report from the U.S. with their reporter by phone. It would take incredibly long time to explain the difference in order to adjust the figures in the reports. During the stuff training, we have been taught that to be professional at everywhere and anytime. Moreover, I realise that the most important feature to be a professional accountancy is responsibility. This is because that a unit of misallocation will cost other team number a huge amount of work to correct it. The experience of taking notes of weekly conferences between senior managers and PWC partner has indicates that how does change in financial policy influence the accounting treatment. For instant, since vice-perminster Mr Le Ke Qiang who visited China Construction Bank at earlier May. He point out that the Rate of Non-Performing Loans could not exceed 7% in the “BIG Four” Chinese bank. This has led Chinese bank to relax its accounting standard of credit rating. It allows me to understand the relationship between government and financial
Internal auditing has become an important part of corporate governance. Internal auditors are tasked with protecting an entity’s assets and producing reliable accounting reports used in decision-making processes. However, the most vital role of today’s internal auditor is testing the efficiency and effectiveness of all aspects of an entity’s operations (e.g., financial and nonfinancial; In’airat, 2015). According to In’airat, the components of corporate governance must cooperate with each other to ensure the efficiency of a functioning business. These components of corporate governance include, but are not limited to, the audit committee, internal auditor, executive management, financial management, and external auditors. Of these components,