Accounting Regulation and Assessment of Emerging Risks - Assignment Example

UNTING RЕGULАTIОN By: Course: Professor: University: State: Date: Question 1. Firms are normally so careful on the kind of employees they recruit for their accounting jobs. One of the qualities they look into is the ability of the new employee to learn the accounting software very quickly. Once they are recruited, they have to constantly master and be able to understand the new accounting software taught them. This software varies from one company to the other according to their preference and the kind of work they do. Data analysis has also become a key consideration in many business sectors, and therefore knowledge of how to do this is an added advantage to the new recruits. Firms encourage the employees to get their CPA license within a very short time after they are employed. The plan of the employees to get to further their knowledge in CPA. The employees can be taken for further upgrading of their skills in their line of duty. The main idea behind every accounting report is to provide useful information for decision making to further the company in its growth and profit increase. Quality is therefore key. Quality reports may help reduce the risk of volatile foreign currency exchange rates; it may also help reduce the risk of making costly mistakes. Knowledge of Excel is one of the paramount and key consideration (Gaffikin, 2005) Good communication skills expressed by the employees can distinguish an individual from others and therefore place them at a higher position for the opportunity than others. However, excellent communication skills without the accounting skills remain vanity. One with good accounting skills and yet not much versed in the good communication skills can perform averagely better and can improve very fast when trained (Martan, 1998).The two of these merged can open many doors. Team player. All the accountants get to be team players only and only when they can be able to work well with others. This is important because they are most likely to find themselves in leadership positions. This is evident by the fact that most firms require accountants to be part of the management team. To examine on this, the companies will require previous work experience or rather if the person they are planning to employ had participated in one such activity that puts them in a position to know how to work with people. Mentoring of entry level employees. This is an important step to be made as this is the way through which the organization gets to improve its efficiency. High-level employees are to be trained to get them acquainted to the managerial positions. Skills such as time management are very important as far as business is concerned. Administrative skills alongside others must not be forgotten behind. The destiny of the business is upon the hand of the management. It should also not be forgotten that even when one is at the topmost position, mentoring and training continues for the prosperity of the business. Before this mentor –mentee relationship, there are a particular thing that must be in place: both must identify areas of improvement that should be worked on, they must have regular face to face meeting, and the mentor has to write a report on the progress of the mentee. This report is forwarded to the mentee’s immediate supervisor. Mentees should also be receptive and be ready to handle assignment and submit in time as their agreement with the mentor is. A post program reporting schedule should be organized where the superior of the mentee can be able to evaluate the progress of the mentoring program as far as the application of the skills is concerned. Putting the acquired skills to practice must be the point of identifying the impact of the training (Hans, 1994). Framework for continuous auditing. There should be an internal audit which aims at finding prevalent risk and the effectiveness of control that can be taken. This normally takes place months after a business has occurred. There is a stepwise process for internal audit as follows: Establish priority Identify audit rules Determine process frequency Configure parameters and execute Manage results and follow-up Report results Asses emerging risks and add to the register. Price fluctuations and its effect on the profit. Some of the ways through which the effects of this can be reduced are large size firms. Multinational companies reduce this risk by having suppliers and customers in many countries so that the price fluctuations offset each other. The risk can also be avoided through logistics to increase the profit margin of the business, so that currency exchange does not affect the growth of the business. When a firm sells its currency to a customer, it is exposed to currency exchange risks. Companies should also be more transparent with their investors in this wise. Having knowledge that fluctuation of exchange rates of currency affect their growth regarding cash flow, they should understand well how their strategies for growth are related to currency exchange and even currency risks. Employees should also be having a regular visit to the accounting journals. This can be monthly if not daily and is quite significant since they get to know what is done in the outside world. In so doing, they also learn about the various applications that have immerged for accounting and their significance particularly in making work easier. Consulting financial auditors ahead of time.In the process of preparing statements, this at sometimes becomes an important step in avoiding some of the costly mistakes and errors. The auditors may sometimes address these types of questions during their planning time together with the clients (Gaffikin, 2005). Companies are all after making good progress, increasing efficiency and thus increasing the profit margin. Therefore the employees must only have the job qualifications that will meet the company's objectives. Skills must, therefore, remain what they must champion on. Without their confidence worn on this matter, there remains no recruitment of new employees who cannot lead there firm to its dream acquisition. This writing is related to the topics: Accounting regulations and measurements. It is from the March 2017 Journal of accounting called the cost of care URL (http://www.journalofaccountancy.com/issues/2017/mar.html) Question 2. (a) Stock compensation is how business entities use stock options to reward employees. This is particularly evident in start-ups which in most cases may lack money to pay their employees. Tax consequences depend on the fair market value of the stock, therefore, in any case, the stock is subjected to tax withholding, and the tax must be paid in cash even if it happened that the employee was paid by equity compensation. The exposure draft, in this case, deals with stock compensation. The provisions of the exposure draft are that the entity must account for the modification before it happens and after it happens: This can be contrary if and only if The calculated value of the award is fair, or it is a good dealing with the employees and even the entity itself. In the case of the vesting conditions. The vesting period which normally begins an anniversary after the employee became eligible to the company .The company afterward allow employees to purchase particular stocks during that period. The period is normally three to four years. After the session is ended, then there is no purchase. The award is classified as a liability or entity. A provision is given to the public to comment on the amendments which were only to take place after the public had given their comments and recommendation. People were also requested to give their suggestion on areas that they felt there should be an improvement effected. (b) There is an agreement in the comments of IMA and BDO, U.S.A and NYSSCPA. These two companies agree to the amendment of the FASB. However, BDO has particular recommendations to the FASB. These are: the required the board to make changes to the quality of the language in paragraph 718-20-35-2A (a).They argued that this was proper for ensuring that small changes in value also needed to be accounted and considered as a modification. Secondly, the preparers should use qualitative analysis to evaluate whether there is an effect of the modification program to the calculation of the value. This eventually leads to a realization of whether there is a fair deal between the values before modification and after this modification is done.The value should always be the same. On the other hand, IMA agreed on the amendments and intimated that proper strategies should be put in place to ensure that there exist remarkable changes and improvements and reduced complexity and cost. The three organizations also agreed that there should not be any more disclosures increased. Similarly, in response to the question of how much time is needed to adopt the amendments, BDO and NYSSCPA were in agreement that the time needed by entities that are not business entities would not be any different from that needed by public business entities. Some organizations were silent as concerning particular questions. From these comments, there can be a conclusion that these comment letters selected are all in agreement with the amendments by FASB. (c) BDO comments are for the regulation. This is because they recommend a language that would ensure a qualitative analysis to establish whether the value before and after the modification remains the same. This is part of the careful steps of accounting regulations. After the implementation of a program, there is an assessment to realize whether it was effective. IMA is also for the regulations in that they also submit to the FASB that the amendment is good and will only remain useful if their implementation leads to the improvement and reduction of cost and even simplicity in operation. (d) The public interest theorem is best explained by the comment letters. The letters by the organizations can only be if there is a provision by the FASB to allow the views of the public. This confirms the fact that the society of accounting includes the public in coming up with the regulations that will guide the accountants on their line of duty. These all are tailored to increase the quality of work efficiency and even for the increased rate of growth of the economic status of the firms. In one way or the other, the work done by the institution needs to be quality. This is because the result of whatsoever work done significantly to the prosperity of the community at large. The idea to allow for the opinion and recommendation of the public particularly means that the public is included in the making of the regulation. The questions such as how much time is needed to adopt the amendment means that the implementation of the comment will be done only and only when the public has also given their views on what would be the appropriate time to make it efficient. The question of whether or not to put in other new disclosures in the topic 718 due to the amendment verily signifies that there is a provision for the public to bring their views on board. Reference list Bradley, P.G., 1967. 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