The period of financial crisis made specialists of all spheres to deepen into the most problematic issues and develop all possible ways out. The aspects of ethical issues in the accounting field is closely interacted with financial changes in the banking system. Such issue as ethical standards in accounting has always been a subject of heated debate. Although, there is a widely held opinion that ethics is a highly personal matter, and it is hardly possible to impose any rules, it should be pointed out that a great number of problems arise in connection with these discrepancies. In addition to that, one should also pay extra attention to cultural differences, which also set obstacles to accountants belonging to various ethnic or cultural groups.
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According to the new created Federal Accounting Board being responsible for financial accounting standards at the period of financial and economic instability, is aimed at the development of regulatory reform. This program will be aimed at rapid decrease of various small financial institutions which can put financial markets and community budget at risk. The Accounting Board will be concentrated on financial settlements regarding regulations from ethical point of view, as it was stated by Frank Lucas and Ed Perlmutter, the members of Financial Service Committee. (Accounting, 2009)
As the president of the International Federation of Accountants, Robert Bunting argues there is a growing necessity for unification, namely, it concerns, auditing process, disclosure, and international relations. He states that in the light of constant globalization effective interactions of different companies or organizations is utterly impossible without generally accepted ethical standards (Robert Bunting, 1). Yet, the question arises, how one can out this reform into practice.
The main problem is that legislation is not always able to regulate ethical behaviors of accountants. Overall, financial accounting theorists have always attached primary importance to the ethical standards, because they act as a guide, but it seems that this issue has seldom been discussed within the context of cultural diversity. Thus, the problem of cultural controversies in accounting field still has to be resolved. 2) The problem of standardization has always been extremely acute in accounting.
The process of globalization imposes very stringent rules on people working in this field. It seems that this issue still requires thorough analysis. Certainly, according to international laws, companies are required to disclose information, yet very often we may speak about the so-called adverse selection, which means that very often accountants tend to misinterpret these rules or even evade them. Therefore, some amendments should be proposed to already existing legislation in order to eradicate any ambiguity. However, such policy is very difficult to implement, because it requires significant structural changes.
Security Exchange Commission plans to converge to IFRS (International Financial Reporting Standards) in 2014. Some scholars as for instance Danita Ostling argue that this conversion may present significant difficulties to people, specializing in accounting (Danita Ostling, 1). Certainly, it will be necessary to develop new data processing systems that can be adjusted to new requirements. Furthermore it is of the crucial importance to identify the accounting areas, which should adapted to IFRS. Overall, the process of adjustment has never been easy; nevertheless, no one can deny that it is urgently needed.
In this respect, it is worth mentioning that these new standards are primarily based on fair-value accounting. Yet, it appears that even new legislation may not bring significant improvement unless SEC does not establish concise evaluation procedure, which will eliminate the possibility of any fraudulent activities (Journal of Accountancy). Theoretical aspect of standardization has often been discussed in the works of many scholars, but the applicability of this issue still has to be analyzed.
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Bill Would Transfer SEC’s Accounting Oversight to Board that Includes PCAOB. 2009. Financial Crisis News Center. Web.
Danita Ostling (2009) Converting to IFRS. Journal of Accountancy. Web.
Journal of Accountancy (2009). Financial Crisis Task Force Will Take Up Fair Value, Off-Balance-Sheet Transactions. Journal of Accountancy. Web.
Robert Bunting Journal of Accountancy (2009). Uniting the Global Profession. Journal of Accountancy. Web.