Essays /

Norwalk Pharmaceutical Division Essay

Essay preview

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 auditors after the conversion from GAAP rules-based to IFRS principle-based. First section will discuss the accountants’ role and the change of ethical thinking way since IFRS has been adopted, based on a Canadian survey which shows the usage of ethical thinking way. Second section briefly discusses the challenges of adopting IFRS with lack of accounting ethical guidance, Vincent J. Love and John H. Eickemeyer (2009) claims as convergence of GAAP with IFRS is probably the most difficult hurdle accountants will face in the future and this will require massive re-education and re-training, which will force firms and companies to spend untold sums of money as well, and finally, ethics has moved to the forefront of pressing issues, thus it will be more critical than ever for accountants to strictly adhere to ethical guidelines in the future.

Firstly, Scott Sims (2009) points that “professional accountants are individuals who have the knowledge and expertise recognized and va...

Read more

Keywords

-1 -119 -195 -196 -297 -391 -47 -498 -518 -70 -8 /eweb/upload/fei/ifrssurvey_1208.deloitte.pdf 1 11 12 13 15 16 185 194 198 1993 1997 2 20 200 2004 2005 2006 2007 2008 2009 2010 2011 2014 215 27 29 293 3 30 377 399 4 40 41 43 43.4 45 46 467 488 495 5 500 55 60 7 9 92.1 95 abacus abdolmohammadi abil accept accg account achiev across act action adher adopt affect alfonso also among appar appear appli applic appreci approach appropri approxim april area argu ashwal aspect assign assist attach attempt audit auditor avail avoid bank barth bartov base becom better beyond bias board bodi bonus briefli bright budget busi c canada canadian capit career case catch cent ceo challeng chang cica claim clark clear client cma code cognit collaps collegi common compani compar comparison complex complianc comprehens conclus conduct consensus consequ consid consider consist consum content continu contract contractu convent converg convers corpor could countri covrig cpa creat crisi critic current curriculum curti d.j damag data date davi dawn decid decis decision-mak dedic defin defond deloitt demonstr design determin devast develop differ difficult disclos discuss divis domin e educ edward effect eickemey ellen encourag enron ensur environment escal especi essenti ethic even ever exampl exercis exist expect experi experienc expertis extent face failur fair fair/just/right far faster fedorowicz felton fewer final financ financi find firm first flanagan flatter focus follow forc forefront foreign formal fortun forward found framework fund futur gaap gabhart gannon general german given global goe goldberg good govern great greater guidanc guidelin h handbook heff higher highest hold holist home honesti hous howev hung hurdl iasb ifr ill ill-judg impact imper implic import improv in-hous includ incorpor increas independ indic individu industri inform inher instead institut instruct integr interest intern interpret introduct investor involv issu j jack jane john journal judg judgment juli juornal justic justifi kevin key kim knowledg known l lack laid landsman lang larg law leas legal less level liabil life like limit linda line litig look lost love lower m magazin main major make manag mani market massey massiv materi matter may mean meaning met method might misinterpret model mohammad money moral mount move much must mutual near need new next norwalk novemb number oddo often one ophera oppos order organ output pad page particular peopl per perform person personnel perspect pharmaceut plan play point ponemon possess post post-secondari potenti pp practic pre pre-convent predomin prepar present press pressur previous principl principle-bas principles-bas privat probabl process profess profession program provid public pure qualiti r rational re re-educ re-train reason receiv recent recogn refer regul reinforc relev reli report reput requir research research-bas respond respons result right role ronald ruin rule rule-bas rules-bas s.r satisfactori scandal sceptic score scott second secondari section see self self-interest sep separ serv set sever sharehold shift show shown signific sim sinc skill social societi sole solv sound sourc specif spend staff standard state statement stock strateg strict stringent structur student studi style suffici suggest sum sure survey switch system take target tax teach technic technolog tend tennesse thing think thorn three thus time tool toward train transit treat trust type u.s undergon underscor understand undertak uneth univers untold upon us usag use v valu verschoor view vincent voluntari voluntarili w warn way weak well went whether whole within work workforc worldcom would wrong www.allbusiness.com www.financialexecutives.org www.financialexecutives.org/eweb/upload/fei/ifrssurvey_1208.deloitte.pdf year