Contemporary issues in accounting – Manipulation of accounting policies
The issues arising in accounting are mostly governance isssues that the regulator has been able to deal with. Financial regulatory framework is the issue in focus for regulators and accounting policy makers. The regulator seeks to make sure that there is accountability, transparency and stakeholders decisions in boardroom. Due to harsh economic output and loss reporting by most entities, they may want to cover to make the company shares look attractive. They manipulate financial reports and earning management for the sake of a good image. The issue of fair value accounting in which executives try to manipulate accounting and assets fair value is the topic of concern.
The Congress of Professional Accountants and Auditors of Australia acknowledged that at present the development of consistent theoretical and methodological concepts, through which it is possible to evaluate already established and newly emerged new accounting concepts and develop on this basis, the theoretical, normative-legal and methodical support of the accounting and analytical process. New conceptual changes in accounting are preceded by the appearance of new accounting objects, and the emergence of new concepts forms a qualitatively excellent style of scientific research of accounting as a science (Annisette et al, 2018). Such a study should be undertaken from the standpoint of a retrospective comprehensive analysis of known concepts of the development of domestic and foreign accounting as an integral component of the institutional system, which is the constructive elements of the accounting analysis system and related management and technology systems.
The most important characteristic feature of the modern stage of development of accounting is the growing trend towards unity scientific knowledge, which is embodied in the wide deployment of interdisciplinary areas of research, in the use of ideas and methods of some sciences in others, the transition from disciplinary research methods to problem-oriented and practice-oriented. The theory and methodology of accounting is realized through the formation and implementation of certain concepts understanding, system). The need to address the concepts of accounting is determined, first of all,the remaining backlog of accounting practices from new requirements to the quality of accounting information, dictated by modern processes of globalization and Australia’s integration into the world economic space (Carvalheiro, 2014). This predetermines the comprehension of the theory and methodology of accounting from the standpoint of institutionalism
Institutional approach has long and successfully developed within the framework of economic science. At the same time, an extensive methodological and analytical toolkit was developed. Its improvement is due to the development and emergence of new interdisciplinary connections, including with modern theory and methodology of accounting. Most domestic scientists and accounting practitioners believe that the prospect of developing accounting is to approximate the principles enshrined in International Financial Reporting Standards (Chatfield and Vangermeersch, 2014).
Theoretical motivation
The processes of accounting reform in Australia in this connection have already led to some transformation of the accounting system. Qualitative institutional changes have been consolidated in accounting, which In the near future, they can have a significant impact on the conditions and effectiveness of its further development.
Institutional approach, accumulating a sufficiently large amount of information on the functioning of various institutions and the results of promising scientific developments in areas adjacent to accounting, makes it possible to put it in the basis of the conceptual solutions being developed at different levels of its development. Over the past few years, Australia has been implementing measures to reform accounting in accordance with international accounting practices (Chen, and Schipper, 2016). As part of activities to implement the Concept of the development of accounting and reporting in the Australian for the medium term. They create the foothold, which ensures the continuation of the development of accounting in this direction.
The specification and definition of the main theoretical and methodological approaches within the framework of the Accounting and Reporting Development Concept presuppose the creation of a concept of accounting, based not only on the notions of objective reality and the need for transition to the International Accounting Standards, but also the results of institutional analysis of accounting (Commerford et al, 2018). The need to rethink certain provisions of accounting theory and methodology is due to the fact that the assessment of the real place of accounting processes in the activities of a modern commercial organization has shown that they cover almost the entire control loop.
Integrity of the conceptual line in the framework of the developed theory and methodology of accounting is presented as an institutional model of accounting that takes into account both the new objects that have appeared and the new quality of pre-existing objects, as well as many ideas and concepts put forward by scientists of different sciences in different time fractals (Dey, 2018). On each of the new stages of economic transformations, accounting draws new tasks from the real accounting practice, scientifically generalizes them and gives an opportunity to present the perspective of its development, and the institutional concept is a kind of answer to the questions posed. The concept will effectively solve the emerging issues provided that in its development not only recent approaches to the theory and methodology of accounting and other sciences that have developed recently but also the entire process of their retrospective dynamics will be taken into account.
Literature review
Accounting paradigm is reflected in a change in practical accounting activities and in the content of research in the field of accounting. Perhaps the simultaneous existence of several accounting paradigms, and accordingly, of several accounting concepts, each of which has its own logic and criteria that determine the science. For consideration and the formation of the concept of modern accounting, the components of the accounting paradigm at different stages of accounting development are investigated. The paradigm is considered as a conceptual scheme, a model, a method for studying accounting. Specifically, under the paradigm, the authors mean the original concept of accounting, the model of setting problems and their solutions based on the corresponding accounting methodology. Thus, the creation of a concept of accounting that meets modern challenges is one of the most complicated and interesting areas of scientific thought.
Directions of improving accounting in the conditions of building its market model should be recognized the consistent development of theoretical concepts, with the help of which it is possible to evaluate the already established, recently developed and proposed accounting technologies and the development on this basis of the legal and methodological support of the accounting process (Griffith, and Kadous, 2015). The development of theoretical concepts occurs in the context of changing the role of the state in establishing accounting rules and principles, which requires a comprehension of new approaches to his theory and methodology, the creation of a coherent institutional theory, reflecting the modern accounting process. The complex of problems related to institutional features of accounting is a new and insufficiently developed direction in economic science (Johnston, and Petacchi, 2017). Analysis of theoretical problems of accounting showed that the development of its concept principles, functions and directions of development during the formation of the Australian accounting concept in the conditions of market economy formation are insufficient.
For a short time in the field of accounting and taxation, many formal rules, laws, decrees, decisions and other normative acts in the field of accounting, auditing and taxation. Australian reforms and the evolutionary development of recent years have prepared the economy and society on to a new stage of profound change. Transition to growth is impossible without full-fledged basic market institutions, the development of a variety of market institutions and their connections, including the accounting institution.
The analysis of the materials made it possible to establish that for the last odes to the institutional approach has taken a prominent place in economic science. It is used in the study of various organizational forms of management, the development of small business and other phenomena. To determine the impact of institutional theories on accounting theory and practice, the main concepts and scientific problems associated with these theories are defined (Schaltegger and Burritt, 2017). This task is new for accounting theory and practice, and its solution is possible only within the framework of institutional analysis of accounting.
Institutional theories are of interest only as a doctrine capable of explaining the current state and prospects of accounting development from the standpoint of interaction of basic economic institutions. This led to a radical transformation of the institutional framework of accounting. In recent years, qualitative institutional changes have consolidated in the accounting, which in the near future can have a significant impact on the conditions and effectiveness of its management.
A comparative analysis of Australian and international financial reporting standards determined the discrepancies between the Australian accounting system and IFRS, which lead to significant differences between financial reporting compiled in Australia and in Western countries. It is established that the main differences between the MSFD and the Australian accounting system are related to the historically determined difference in the ultimate goals of using financial information.
The main differences between financial statements prepared in accordance with IFRS are used by investors and other economic agents and financial institutions. Among the main directions of the reform implemented in the Australian Federation in order to bring the national accounting system in line with international financial reporting standards, the need for reorientation regulatory process from the accounting process to the financial statements, in which information should be provided, a significant To users (Wang, Vulcheva and Horizons, 2015). In turn, to strengthen the communication capabilities of reporting, a certain transformation of the accounting methodology is necessary. However, for the sake of justice, it should be noted and significant negative trends
A number of problems remain unresolved for a long time, and above all for historical and conceptual reasons. Among these problems, the main question is the need to use the developed Australian methodology and accounting practices, their conformity to the theory Accounting for the directions of the solution of this problem was made by the authors taking into account the fact that accounting is a rather complex system influenced by the unity of legislation and the development of all components of the market economy. Insufficient attention to the implementation of the hints activities during the accounting reform, a further delay in determining the issues raised have a negative impact on the accounting and makes it unrealistic positive development in accordance with international requirements.
From the timeliness of the solution of the tasks facing Australian accounting, it depends on how quickly the material production will develop in the country. The solution of these problems requires the implementation of an active state policy with the participation of state and professional organizations, scientists and practitioners in implementing the above approaches to the creation of a rational and reliable accounting system (Hoque, 2018). This transformation occurs by changing individual accounting practices, adjusting reporting forms, the appearance of new accounting objects and changes in the regulatory framework. Globalization has led to the fact that many aspects of accounting as a scientific discipline and practice have also acquired an international character.
- Changes in accounting principles have caused major losses in companies
- Accounting changes keeps on distorting fundamentals of accounting principles
Thus, the Law “On Accounting” provides for the definition of accounting only, according to which “accounting is an orderly system for collecting, recording and summarizing information in monetary terms about the property, the obligations of the organization and their movement through continuous, continuous and documented accounting of all economic In the meantime, in our opinion, the need for the appearance and functioning of both types of accounting in our country is not a tribute to fashion, but the imperative of time (Hoque, 2018).
Adherence to unified accounting rules, development of accounting calculations, reasonable calculation of financial results and reporting will ensure sufficient transparency of the reporting data, their understanding and unambiguous interpretation in the international context. At the same time, the descriptors of cost accounting (material intensity, capital intensity, provision of own circulating assets, labor productivity and profitability of production) acquire the binding significance of all types of accounting. They become dominant criterion indicators when making managerial decisions and assessing the investment attractiveness of the market’s economic agents.
References
Annisette, M., Cooper, C. and Gendron, Y., 2018. The question of research diversity in “top” accounting journals.
Carvalheiro, J., 2014. An interactive learning approach to accounting classes (Doctoral dissertation).
Chatfield, M. and Vangermeersch, R., 2014. The history of accounting (RLE accounting): an international encylopedia. Routledge.
Chen, Q. and Schipper, K., 2016. Comments and observations regarding the relation between theory and empirical research in contemporary accounting research. Foundations and Trends® in Accounting, 10(2-4), pp.314-360.
Commerford, B.P., Hatfield, R.C. and Houston, R.W., 2018. The Effect of Real Earnings Management on Auditor Scrutiny of Management’s Other Financial Reporting Decisions. The Accounting Review.
Dey, C., 2018. Contemporary Issues in Social Accounting. Social and Environmental Accountability Journal, 38(2), pp.157-158.
Griffith, E.E., Hammersley, J.S. and Kadous, K., 2015. Audits of complex estimates as verification of management numbers: How institutional pressures shape practice. Contemporary Accounting Research, 32(3), pp.833-863.
Hoque, Z., 2018. Methodological issues in accounting research. Spiramus Press Ltd.
Johnston, R. and Petacchi, R., 2017. Regulatory oversight of financial reporting: Securities and Exchange Commission comment letters. Contemporary Accounting Research, 34(2), pp.1128-1155.
Schaltegger, S. and Burritt, R., 2017. Contemporary environmental accounting: issues, concepts and practice. Routledge.
Wang, X., Vulcheva, M. and Horizons, F.A., 2015. RESEARCH ACTIVITIES Publications:” Increasing Liquidity on Global Stock Exchanges: The Structure of Euronext”,(2015).(Co.
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