Professional Accounting - The Social Context and Accounting - Assignment Example

FINAL RESEARCH REPORT Student’s Name Institution Instructor’s Name Course City Date 1. Contextual Appreciation and Awareness of Assumptions Accounting regulations have been developed with an aim of ensuring that accounting practices have specific standards and become universally accepted across the world. Accountants are expected to follow some of the numerous regulations that have been developed to ensure that the financial reports being generated by are highly reputable (Deegan 2009). Australia is currently highly regulated, and all these are because of the experiences of corporations such as Enron, WorldCom, and many others. Even though there are some ways through which these numerous regulations are considered important, there are equally numerous challenges that accountants meet in their daily work. Professional accountants need to come up with informed financial statements and ensure that all the procedures are clearly followed during preparation and even during the disclosure level. Some of many regulations that are currently being formed face purposeful intervention by economic entities that are interested in affecting the outcome of all process with an aim of increasing economic value of these entities (Gipper, Lombardi, & Skinner 2013). It, therefore, means that many of these regulations are not formed with the interest of ensuring that accounting system is standardized but for enriching a few individuals. This goes in contrary with the accounting profession, which is to provide highly objective and true accounts of the company without omitting or including anything that is considered of material gains. As accountant will be working hard to remain professional in his or her duty of coming up with true accounts, the set regulations most of which are formed through political influence makes the compromise their ethical and professional code of conduct (Radebaugh 2014). Many big and once reputable companies fell due to the development of unclear accounting standards that could only be understood by the management and when such things happen accountants are always forced to follow such standards without questioning. Accountants are expected to remain straightforward and honest when handling their professional accounting duties, which only mean that they are expected to be involved in fair deals and be truthful (Godfrey et al. 2010). When a standard is developed through political influence and such a regulation is brought forth with the major intention being protecting the interests of a few industries or firms or individual businesspersons then it will interfere with the accountants work. It is known that accountants are obliged to follow all the accounting standards set forth and agreed upon by those in charge of development and review of the current regulation. It, therefore, means that an accountant may be forced to prepare financial reports that are not in line with the original and universal standard accounting procedures. Most accountants who tend to go against such decision or even those who try to explain the problem in such regulations are relieved of their duties as accountants (Scott 2009). Accountants have their professional standards and code of conduct in their duty that every accountant is expected to adhere to, with the introduction of newly formed regulation that normal conflict the general understanding of accounting work, accountants remain in a much bigger problem when it comes to making decisions (Botzem 2012). Normally the bodies that influence the decision of forming various regulations are so powerful, and it may be very difficult for the accounting body to counter and due to conflict of interest, some accountants may end up compromising their ethical and professional code of conduct and comply with such subjective regulations for self-benefit. References Botzem, S. 2012 The politics of accounting regulation: Organizing Transnational standard is setting in financial reporting. Edward Elgar Publishing. Deegan, 2009 Financial Accounting Theory (3ed), McGraw-Hill Ltd: Australia. Gipper, B., Lombardi, B. J., & Skinner, D. J. (2013). The politics of accounting standard-setting: A review of empirical research. Australian Journal of Management, 38(3), 523-551. Godfrey et al. 2010 Accounting Theory (7ed), John Wiley, & Sons Australia Ltd: Australia. Radebaugh, L. H. 2014 Environmental factors influencing the development of accounting objectives, standards, and practices in Peru. The International Journal of Accounting Education and Research. Urbana, 11(1), 39-56. Scott, 2009 Financial Accounting Theory (5ed), Pearson Ltd: Canada. 2. Developing own perspective or position When the term accounting is mentioned, one thing that comes into the mind of many people is the bookkeeping or those who prepared accounting books. It is possible to say that accountants are in most cases involved in the work of preparing accounting books. But one thing that comes out of the lectures is that accounting is one of the professions that gets deeper into some of the activities that directly affect human beings and through the study of accounting as a course, one is capable of coming up with highly informed ways of going through many problems that we face (Deegan 2009). From lecture four, various costing techniques are clearly discussed with proper explanation in each case explaining why one costing technique and when it is best needed. With such kind of information, the accountant is set to come up with true statements of account that will be a reflection of the current market state. When one would think that some of these techniques are just developed without some proper research done, it is clearly that there are several standards that are in support for nearly every technique under discussion (Langfield-Smith, Thorne & Hilton 2010). So may not have known how important accounting but from lecture four, various groups such as employees, customers, ethical investors, and many other groups are portrayed to be relying on accounting information to be able to make informed decisions (Doupnik-Perera 2009). Accounting like other professions is equally very friendly to the environment by the introduction of accounting for a sustainability project. Through the study of accounting, more so during lecture nine, it was amazing to understanding how important accounting is when it comes to deciding the right organizational behavior and effective reward system in an organization. Various accounting tools such as Return on Investment (ROI) are of great use when calculating the performance level as regards to overall return to the organization (Ivancevich, Konopaske, Matteson 2011). Organizations through accountant are capable of arriving at the right compensation rate based on the figures got through ROI, which is a very positive way to look at accounting as a profession and as a functional unit in an organization (Godfrey et al., 2010). One major reason for the existence of most corporations is to maximize shareholders income. The one way to know whether a given company is maximizing shareholders wealth, various accounting measure techniques such as Market Value Added (MVA), Economic Value Added (EVA), and Shareholder Value Added (SVA) are employed (Flamholtz 2012). When doing a conventional measurement of performance, one thing that comes out is the focus on profit and other related components such as revenue and costs, which remains to account. It is through accounting that some of the decisions on performance appraisal can be done and as such, accounting practice remains one of the most important parts of nearly everything we do. References Deegan, 2009 Financial Accounting Theory (3ed), McGraw-Hill Ltd: Australia. Doupnik-Perera, 2009 International Accounting (2ed), McGraw-Hill Ltd: Australia. Flamholtz, E G 2012 Human resource accounting: Advances in Concepts, methods, and applications. Springer Science & Business Media. Godfrey et al. 2010 Accounting Theory (7ed), John Wiley, & Sons Australia Ltd: Australia. Ivancevich, JM, Konopaske, R., Matteson, M.T. (2011). Evaluation, Feedback, and Rewards. Organisational Behaviour and Management (9 ed.) Langfield-Smith, Thorne & Hilton. (2010). Management Accounting: Information for Creating and Managing Value. Australia: McGraw-Hill. 3. Support Data/Evidence Both the accounting profession and even the standard setters experience an increase in pressure due to the multinational companies, regulators for the securities of the stock exchanges, and even the international institutions for lending. They face the pressure so that they may find the way forward of reducing the diversity and the even the harmonization of the accounting standards and the practices. Often, the difference in the accounting system always affects the international capitals in some ways (Doupnik 2009). First, the international businesses that operate in various countries are required to prepare the accounts for their operations in every state, which compile with the rules sets with those countries. The businesses must also ensure that they convert the accounts so that they conform to rules used in that country. Thus, this paper analyzes the way in which the accounting frameworks such as the OASB and IFRS should change so that they may support the future societies. In most cases, the accountants are recognized that they make valuable contributions to the society through the provision of the information that flourishes the entrepreneurship. The analysts give the information to assist various businesses to operate efficiently, protects the interests of the stakeholders, pricing the shares somewhat, and even satisfying the taxation and the audit requirements (Gray & Hope 2012). However, the accounting has not enjoyed the established position, making many people take the status of the profession for granted. Thus, it is worth examining various factors that should change the accounting frameworks like the IASB and IFRS so that it may support the future societies. First, the accounting structures should look at the underlying laws and the political systems in various countries that may affect the reporting of the accounting information internationally. It involves harmonizing various regulations that hinder the access to the accounting information from different countries. The barriers placed on the companies that trades internationally should also be checked to analyze the way forward for the future societies. Another issue is the tax systems in various countries in which the accounting framework should set the standard rates for the tax systems of the countries that trade internationally. They should find the means that may make the accounting choices that are tax driven and domestic not to flow through the statements of the IFRS. They should also do away with the differences in the economic and the political influences on the international financial reporting (Godfrey et al. 2010). It will assist in ensuring that the auditors, managers, court regulations, and even other parties are not influenced by the powerful local political and even the economic forces. The IASB should also have the ability that can make them enforce the application of the accounting standards in the countries that have failed to adopt the IFRS. The accounting frameworks should also ensure international consistency in monitoring and implementation of the accounting standards and the following mechanisms for enforcement. When the account tying frameworks works on these modifications internationally, then the international conventional accounting systems will not have the international differences in the accounting practices (Deegan 2009). The future accounting systems will not experience the differences in the taxation systems. The accounting choices that are tax driven will not flow through the IFRS since there will be set international standards. The operation of the business activities will also not experience the differences I the political and the economic impacts in the financial reporting. The future accounting system is also not expected to have the differences in the implementation, the monitoring, and even the enforcement of the accounting standards due to the international consistency (ScoK 2009). References Deegan 2009 Financial Accounting Theory (3ed), McGraw-Hill Ltd: Australia. Doupnik-Perera 2009. International Accounting (2ed), McGraw-Hill Ltd: Australia. Godfrey et al. 2010. Accounting Theory (7ed), John Wiley & Sons Australia Ltd: Australia. Gray, R. and Hope, A. J. B. 2012. 'Power and Policy-Making: The Development of an R&D Standard,' Journal of business Finance am Accounting, Vol.9, No.4, pp 531-558. ' Bruce, R. Accountancy, Aug 2012. Vol. 136, Issue 1344; p 25. ScoK 2009. Financial Accounting Theory (5ed), Pearson Ltd: Canada. 4. Case Study Reflection The relationship between the social context and accounting has been speculated in most instances. However, the relationship has been focused on the little systematic analysis. The paper gives the issues that concern the social nature of the accounting practices and the identification of various problems that may exist (Davis et al. 2014). The paper will conduct the social analysis of different even and will seek to draw various issues and the problems that emerge with the reference to the documentary film known as the FRACKMAN. This documentary follows a story of the self-proclaimed worse condition for the environmental activist. According to this documentary, the accounting is harmful when it is looked at regarding the social context. The film gives the narrative method from the perspective of Pratzky when told for the first time that the gas well should be built on the property he possessed (Burchell et al. 2010). He works together with others so that they could hinder the building of the international gas companies. After that, Pratzky looks for the information through speaking to different property owners and even the farmers with the region where the gas wells are built. According to the information that he gets, the wells leads to severe contamination of the water, and he argue that it is appalling that the water bubbles because of the gas released that come from the ground, making it flammable. Another issue for Pratzky is the noise that is throughout the day and the lights on the properties that come due to the gas wells that are in constant operations together with the trunks that are always coming as well as going all the hours (Maunders & Burritt 2011). Another dire terrible consequence is the issue of the health problems that the gas wells causes, which leads to the hospitalization of the children. The property owners are also not given the complete information concerning the things that the international companies with the gas well (Burchell et al. 2011). He realized that the residence had the burden of the proof to show that the gas wells that near the homes and the farms of people are very dangerous. Thus, he takes a serious covert operation, which include disguise to himself as well as the mate and workers for the gas company. He also sneaked at night into the site so that he could take the samples for the water and the soil for the lab analysis. For the film, one can conclude that the social context and the accounting are very parallel to one another. The international corporation, where the accounting is the major, always leads to environmental pollution. Pratzky gives various aspects of the pollutants that emerge due to the gas wells built on his property. He talks of the factors such as the water pollution, noise, pollution, and even the health issues (Baxter & Chua 2013). These are all social problems that are being affected by the international gas companies build on those properties. The bitterness that he has concerning the social factors being affected by the international pollutants makes him go for the best option of handling the situation. He becomes the frackman, which is the anti-fracking vigilante when opposing these foreign companies concerned with the building of the gas wells (Frackman 2013). Even though the accounting aspects are right issues, they run parallel with the societal context. References Baxter, J., & Chua, W. F. 2013. Alternative management accounting research—whence and whither. Accounting, organizations, and society, 28(2), 97-126. Burchell, S., Clubb, C., & Hopwood, A. G. 2011. Accounting in its social context: towards a history of value added in the United Kingdom. Accounting, organizations and Society, 10(4), 381-413. Burchell, S., Clubb, C., Hopwood, A., Hughes, J., & Nahapiet, J. 2010. The roles of accounting in organizations and society. Accounting, Organizations and Society, 5(1), 5-27. Davis, F. D., Lohse, G. L., & Kottemann, J. E. 2014. Harmful effects of seemingly helpful information on forecasts of stock earnings. Journal of Economic Psychology, 15(2), 253-267. Frackman, R. (Director). 2013. Litigating copyright, trademark and unfair competition cases 2013 [Motion picture]. Practising Law Institute. Maunders, K. T., & Burritt, R. L. 2011. Accounting and ecological crisis. Accounting, Auditing & Accountability Journal, 4(3), 0-0. Read More