Norwalk Pharmaceutical Division
Switching the standards for financial statements from a rules-based system such as U.S. GAAP to a principles-based system such as IFRS could create greater ethical challenges for accountants
ACCG 399 Research-Based Assignment
Contents 1. Introduction 3
2. Main point 1 5
3. Main point 2 7
4. Main point 3…. 9
5. Conclusion 11
References 12
Introduction
Social and professional expectations have been undergone a major shift as the global moves to adopt International Financial Reporting Standards (IFRS) which is a set of accounting standards, developed by the International Accounting Standards Board(IASB) as the global standard for the preparation of public company financial statements. To date, industry focus has been mainly on the technical aspects of IFRS adoption; however, IFRS also is likely to impact the ethical aspect of accountants’ professional judgment, because IFRS requires the use of a more “principled” approach to accounting standards than previously required a rules-based system General Accepted Accounting Practices (GAAP). IFRS used in Global Fortune 500
Barth, M. W. Landsman and M. Lang (2008, pp. 467-498) provide that with the adoption of a more principled approach to accounting standards, the ethical aspect of accountants’ professional judgment takes on a greater importance, more professional judgment will be needed and more ethical challenges for accountants, because as professionals, accountants are required to act with integrity and professionalism. They need to understand that ethics and compliance are very important in their professional life. Corporate collapse of Enron, WorldCom, and recent banking scandals have shown that unethical accounting practices and ill-judged decisions can have devastating consequences for a firm, individuals, investors and, in the case of audit work, the capital markets.
This report discusses the ethical challenges of accountants and
ACCG 399 Research-Based Assignment
Contents 1. Introduction 3
2. Main point 1 5
3. Main point 2 7
4. Main point 3…. 9
5. Conclusion 11
References 12
Introduction
Social and professional expectations have been undergone a major shift as the global moves to adopt International Financial Reporting Standards (IFRS) which is a set of accounting standards, developed by the International Accounting Standards Board(IASB) as the global standard for the preparation of public company financial statements. To date, industry focus has been mainly on the technical aspects of IFRS adoption; however, IFRS also is likely to impact the ethical aspect of accountants’ professional judgment, because IFRS requires the use of a more “principled” approach to accounting standards than previously required a rules-based system General Accepted Accounting Practices (GAAP). IFRS used in Global Fortune 500
Barth, M. W. Landsman and M. Lang (2008, pp. 467-498) provide that with the adoption of a more principled approach to accounting standards, the ethical aspect of accountants’ professional judgment takes on a greater importance, more professional judgment will be needed and more ethical challenges for accountants, because as professionals, accountants are required to act with integrity and professionalism. They need to understand that ethics and compliance are very important in their professional life. Corporate collapse of Enron, WorldCom, and recent banking scandals have shown that unethical accounting practices and ill-judged decisions can have devastating consequences for a firm, individuals, investors and, in the case of audit work, the capital markets.
This report discusses the ethical challenges of accountants and
References: Barth, M., W. Landsman and M. Lang. 2008. International accounting standards and accounting quality Bartov, E., S.R. Goldberg, and M. Kim. 2005. Comparative value relevance among German, US, and International Accounting Standards: A German stock market perspective. Journal of Accounting, Auditing and Finance 20(2): Page 95-119. Covrig, V., M. DeFond, and M. Hung. 2007. Home bias, foreign mutual fund holdings, and the voluntary adoption of international accounting standards. Journal of Accounting Research 45 (1): Page 41-70. Deloitte. 2008. November 2008 IFRS Survey Results. Available from: www.financialexecutives.org/eweb/upload/FEI/IFRSSurvey_1208.Deloitte.pdf Felton, Edward L and Ronald R Sims Flanagan, Jack and Kevin Clarke. "Beyond a Code of Ethics: A Holistic Model of Ethical Decision-Making for Accountants." Abacus 43.4 (2007): 488-518. Gannon, D.J. and A. Ashwal. 2004. Financial reporting goes global. Journal of Accountancy 198(3): 43-47. Heffes, Ellen M. 2010. “Global accounting firm CEOs on challenges—transitioning from GAAP to IFRS, and more” viewed 29 Sep. 2011 < http://www.allbusiness.com > Linda Thorne & Dawn Massey Oddo, Alfonso R. "A Framework for Teaching Business Ethics." Journal of Business Ethics 16 (1997): 293-297.