Impact of Change in the Accounting Standard and Law

Question: Discuss about the impact of change in the accounting standard and law or regulations on the business and accounting profession. Answer: Rationale As we all are aware that the IFRS adoption by an organization will consequently need the changes in the balance sheet presentation that an organization required to do. Lets take an example like debt that has been associated in violation which has been requires to be shown under the head Current Liabilities. Moreover, Deferred Tax liabilities as well as assets are required to be shown under non- current items. Also on other hand, if look at the valuation of the inventory, it will be found that it is required to show inventory as a amount lower of the cost or NRV whichever is less by using IFRS which is unlike GAAP. Further, asses revaluation requires to be done in case the organization is listed as well as the same must be recorded on regular basis which should be at the fair value Research Objectives This topic would have impact on corporate management and investor since it has been seen that corporate management would have more benefit from the simpler rules and standards which have been followed worldwide. And the change led them provide an opportunity for raising the capital. However in case of investors, they are required to re-educate themselves again in regard to the change in standard which sometime led them crash to deal with the same. Research questions 1. Whether shift from the current standard to the internationally accepted which requires people to learn new impact whether would lead or result in consistency for the accounting practices? 2. Whether it creates complex set of guidelines in order to establish the criteria or rules? 3. At the time of considering or taking decision in regard to providing of fund by the investors whether it would create problem as it requires them to identify accounting reporting? Key literature sources Gerhard G. Mueller, Accounting Principles Generally Accepted in the United States versus Those Generally Accepted Elsewhere,International Journal of Accounting(Spring 1968), pp. 91103. American Accounting Association, Report of the American Accounting Association Committee on International Operations and Education 19751976,Accounting Review(Supplement) (1977), pp. 65101. A. Hepworth, International Accounting Standards,The Chartered Accountant in Australia48 (2) (August 1977), pp. 1719 Standards and Statements - AICPA. (2016).Aicpa.org. Retrieved 21 May 2016, from https://www.aicpa.org/Research/Standards/Pages/default.aspx. Mini literature review As it is the clear fact that it is required to prepare financial report in a way that it will provide true fair view in regard t the financial position of the company. This would also help the investors or can be utilize by the potential stakeholders such as customer, supplier, and creditor in order to make investment decision. So, it can be said that it will consequently help to evaluate the performance, earning and also simultaneously help to forecast the income of the company along with the associated risk Since it has been the relevant fact that financial reporting to be considered as essential aspects in respect of the organization or entity. Certain rules as well as regulations which are also known as principles by the governing authority for the Accounting that requires to be followed by every entity or organization at the time of recording the transactions as well as operation of the entity. It has been clear stated that all the transaction must be recorded as per the principles as well as guidelines issued by the GAAP. During the period of 1990s and 2000s, it was found that there was beginning of the financial scandal which directly or indirectly creates a question in regard to the reliability for the financialstamtnetsof the organization or entity. Moreover, as a result of the same, it was found that faith have been lost in regard to the financial position by the investor at the time of making an investment decision. As a result of the same, in the time being it result to smash the whole market. Research Methods / Research Plan This report specifically focuses on the impact of change in accounting standard on the professional which basically prescribes impact of the change on stakeholders also such as investors, suppliers etc. For the above, information has been collected from FASB and American Accounting Association hence specifically not includes any primary data. It has been specifically provided that every transaction must be recorded in accordance with the rules as well principle specifies in respect of the same. Transactions must be recorded in accordance with the accounting standards as issued by the GAAP. Hence opinion in regard to the same using books, journal, and newspaper has been obtained. References Gerhard G. Mueller, Accounting Principles Generally Accepted in the United States versus Those Generally Accepted Elsewhere,International Journal of Accounting(Spring 1968), pp. 91103. A. Hepworth, International Accounting Standards,The Chartered Accountant in Australia48 (2) (August 1977), pp. 1719 Standards and Statements - AICPA. (2016).Aicpa.org. Retrieved 21 May 2016. Highered.mheducation.com. (2016).The Development of Financial Accounting and Reporting Standards. Huang, C. and Lai, G. (2004). Knowledge management system: an agent-based approach.Knowledge Management Research Practice, 2(2), pp.80-94. Mca.gov.in. (2016).impact of change in accounting standard. American Accounting Association, Report of the American Accounting Association Committee on International Operations and Education 19751976,Accounting Review(Supplement) (1977), pp. 65101.