Assess the accounting function within the organization in the context of regulatory and ethical constraints

 

What is an Accounting Standard

A fundamental guiding principle that establishes the processes and practices of financial accounting is known as an accounting standard. Accounting standards provide financial transparency while simultaneously boosting financial accountability.

A corporation's financial reporting must consider an accounting standard. A few examples of accounting rules that are often applied are segment reporting, goodwill accounting, an authorized method of depreciation, company mergers, lease classification, a measure of outstanding shares, and revenue recognition.

For international corporations with headquarters outside of the United States, the International Accounting Standards Board (IASB) provides rule- and principle-based accounting guidelines. The set of rules known as GAAPs, which were created in the United States, serve as the basis for widely accepted accounting standards for preparing and disclosing financial reports (Team, 2022).

 

What Are International Accounting Standards (IAS)?

International Accounting Standards specify the reporting and recording requirements for various accounting transactions in an organization's financial statements. In order to improve the investment climate, they sought to lessen regional differences in financial statement presentation and transaction accounting.

The rules were created by the International Accounting Standards Committee and were in force from 1973 until 2001. The guidelines were no longer released after the organization split, leaving a list of 41 criteria that addressed topics like financial statement presentation, inventories, and agriculture. The committee has been replaced by the International Accounting Standards Board (IASB), which now issues International Financial Reporting Standards. The IASB has ratified each International Accounting Standard.Organizations in the United States follow Generally Accepted Accounting Principles rather than the International Financial Reporting Standards (accounting tools, 2022).

                                                                                     

 What exactly are SLA Standards? 

SLA, which stands for "service level agreement," is a commonly used abbreviation. Why do you need to know this? If you're a business owner looking for expert accounting services to handle your bookkeeping, you must find a company that offers precisely specified SLAs. If not, you can have a nasty surprise when it comes to getting superior service. Following are some recommendations for assessing SLAs offered by outsourced accounting services. Only one bookkeeper will be your sole point of contact. This is an important one. The last thing you want is for your account to be handled by a different staff every day of the week. Instead than focusing on security concerns, take into account the annoyance of having too many hands in the pot and not knowing who to call at any given time. Working with trustworthy accounting firms that include this as one of their primary SLAs and offer a line of contact between you and your designated bookkeeper is advised (Gerber, 2022).

 

What are IFRS Standards?

Financial statement representation of transactions and other accounting events is governed by International Financial Reporting Standards (IFRS) standards. They are composed of a number of accounting regulations. They are designed to uphold the financial sector's standing and transparency, enabling investors and business owners to make prudent financial decisions.

IFRS standards, which were created to create a uniform language for financial statements that can be easily understood from company to company and country to country, are issued and maintained by the International Accounting Standards Board. (Team, 2022)

 

Statutory framework for accounting

A nation's accounting system is influenced by the application of IFRS, professional associations, national accounting standards, and/or national accounting frameworks. Although though harmonisation of accounting is the main characteristic of accounting in the twenty-first century, there are still many national peculiarities that vary from country to country in the accounting profession. A national accounting framework is necessary for preserving accounting records, account charts, annual accounts, and applying national and international accounting standards.

Such accounting rules are referred to as "accounting principles with substantial authoritative support" (GAAP) (Gibson, 2001) The minimum generally accepted accounting principles are a set of customs, ideas, rules, and procedures (GAAP). The United States GAAP is the one that is most well-known. Nonetheless, every nation has its own set of generally accepted national laws, whether they take the shape of accounting standards or something else (law, rules, etc.). There is a need for accounting harmonization because each nation has distinct national accounting regulations as a result of tendencies toward globalization. The research has identified four main approaches for lowering the variation in accounting practice across national boundaries (www.researchgate.net, 2020).

International financial reporting standards

The goal of the International Financial Reporting Standards (IFRS) is to make financial statements for publicly traded companies standard, transparent, and easy to compare on a global scale. One of the 166 jurisdictions for which IFRS now offers comprehensive profiles is the European Union. In the United States, a unique methodology known as Generally Accepted Accounting Principles (GAAP) is used (GAAP). The IFRS are published by the International Accounting Standards Board (IASB). International Accounting Standards (IAS), the standards that came before IFRS and were replaced by them in 2001, are occasionally confused with the IFRS system (KENTON, 2022).

Sustainability governance

Maintaining anything entails performing it regularly. Something is not sustainable over a specific period of time if it cannot be completed in that time. After starting the engine in a garage with the windows closed, a car can only be maintained for a short time. The effects of burning fossil fuels on the ecosystem, however, won't be felt for many years. Various programs need to be measured for sustainability over varying lengths of time.

A business can improve relationships with external stakeholders, implement strategy across the board, uphold goal-setting and participation, and ensure complete responsibility with the aid of sustainability governance (www.bsr.org, 2019).

 

What is corporate governance?

Corporate governance is the term used to describe the system of rules, practices, and policies that govern and control a firm. Striking a balance between the needs of a company's different stakeholders, such as shareholders, senior management, customers, suppliers, financiers, the government, and the local community, is typically the goal of corporate governance.

Since it provides the framework for attaining a company's goals, corporate governance encompasses almost every area of management, from action plans and internal controls to performance evaluation and corporate disclosure (Fernando, 2022).

 

 The Benefits of Good Corporate Governance

·         Increase your potential for financial gain. A solid governance structure has been shown to result in better operational outcomes, which strengthens the economy and increases a company's profitability. It presents an extensive road map for handling both circumstances and helps firms discover possibilities and hazards.

 

·         To encourage investment. As a business experiences continuous and consistent growth, investor confidence rises, making it easier to raise capital and resulting in more tolerable interest rates for business loans.

 

·         It increases adherence. Effective corporate governance depends on compliance. The board shall identify all applicable local, state, and federal laws and regulations and work to uphold them.

 

·         Promote intelligent decision-making. Performance is boosted by the board's capacity to make timely, informed decisions. Good governance ensures that all the information needed by board members is accessible in one place so they can make decisions that benefit the company.

·         We support transparency and responsibility. A robust corporate governance framework ensures transparency, and the board must be held accountable for missed deadlines and generally poor performance.

·         Raise the company's reputation.

·         Businesses with a strong focus on good governance are more likely to attract dependable partners who can advance their goals. These stakeholders include potential employees, governmental bodies, investors, lenders, vendors, and even suppliers (Morris, 2022).

 

What is Tax Act?

Taxation is the process by which a taxing authority, usually a government, imposes a financial responsibility on its citizens. A key component of civilisation since the beginning has been the payment of taxes to governments or bureaucrats. Taxation refers to all forms of imposed financial obligations, such as income taxes, capital gains taxes, and estate taxes. Although "taxation" can refer to both an action and a noun, the term is most frequently used to describe the resulting income.

 

Different Types of Taxation

Taxes are applicable to all different types of levies, as was already stated. They could include, but are not limited to:

Governments impose income taxes on all monetary revenue generated by entities they control, including people and businesses. India's income tax is levied, managed, collected, and reclaimed under the Income Tax Act, 1961. Starting on April 1st, 1962, it came into force. Any person is subject to income tax at the rates specified in the relevant Central Act for the assessment year, along with any applicable surcharges and cess. Real estate, commercial transactions involving the sale of stocks or the purchase of a home, and other tangible property are all subject to taxes. Among the various taxes, there are income, corporation, capital gains, property, inheritance, and sales taxes.

 

·         Corporate tax: The revenue of the company is taxed in this manner.

·         Capital gains: A capital gains tax is imposed on any earnings or capital gains made by people or businesses as a result of the sale of specific assets, such as stocks, bonds, or real estate.

·         Property tax: The owner of the property is liable for paying the property tax that is assessed by the local government. Based on the value of the property and the land, this tax is calculated.

·         Inheritance: Those who inherit a decedent's estate are subject to a certain type of tax.

References

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AUDIT HOW, 2022. AUDIT HOW. [Online] 

Available at: https://audithow.com/investor-ratios/ [Accessed 10 October 2022].

Business jargons, 2022. Business jargons. [Online] 

Available at: https://businessjargons.com/debtors-turnover-ratio.html [Accessed 21 September 2022].

Fernando, J., 2022. Investopedia. [Online] 

Available at: https://www.investopedia.com/terms/a/accounting.asp

Gerber, B., 2022. Accounting department.. [Online]