Importance of Accounting Standards in Professional Accounting

Question: Discuss about the Importance of Accounting Standards in Professional Accounting. Answer: Project Context The project study research in context with the professional accounting and accounting standards. After the completion of the Master of Professional accounting degree, my goal and objective to become an accountant and practice it in a professional manner. Professional accounting is my future career profession that helps to grow and develop my career in the field of accounting in future. According to Demerjian, P.R. (2011), accounting is defined as science and art to record the transactions of the business to take an important decision regarding financial matters. Accounting standards are the set of principle sand guidelines which helps accountants or business to ensure that accounting decisions are taken in a professional and reasonable manner. Professional accountants are the important human resource in the organization that helps to create and sustain company values and growth. Moreover, accounting standards and guidelines provide the quality financial reporting and reliable financi al statements information to the accountants and accountant evaluate, assess and present the information in a professional manner and they are considered as professional accountants. In Addition, the professional accountant is the key resource of any business. They help businesses to frame strategic financial information in the areas of budgets, costing and taxation. They seek advice and guidance to the top level executives regarding important financial matters which can be risky for the business in financial aspects. They follow the various accounting standards and reporting procedures in financial statements to reduce the level of risk in the future. Professional accounting skills cultivate the knowledge of accountants, creativity, and ability to solve the complex issues at their end (Deegan, 2013). In this field, accountants are solely responsible for the financial matters of the business. Further, good training of employees regarding accounting standards and principles develops the smart logics and tricks to resolve and identify the financial issues significantly. From the views of Kaplan, (2011) it stated that professional accounting profession is considered as the respected position in the society as well as in the organization. This position is important because it deals with the complex financial matters and maintains the common interest of the general public. Like other professions, professional accounting is increasingly complex to demonstrate the relevance in the capital markets and their capability to meet the new issues in the business. The profession of professional accounting is perceived as a valuable position not only limited to the organisation but also important to the public. In the past recent years, it has been identified from the studies of the market research which evident that professional accountants does not follow the accounting standards in their profession. They manipulate and breach the accounting standards and principles and involved in fraudulent activities. All these issues put a question mark on the integrity of the profession and thus several laws were implemented to reduce these wrong practices and initiatives were design to protect the interest of the public in accounting profession (Duff, 2016). However, it is difficult for accountants to face the pressures of the public and organization to maintain the demands of the clients and follow accounting standards to protect the integrity of the profession. In this particular situation, accountants need to prepare professionally to carry out their tasks so that in difficult times they cannot break the accounting standards to reduce the value of the profession. Project Proposal Research Background Accounting standards and principles are important for every firm that aims to remain competitive and survive in the market. Accounting standards are the base of the professional accounting profession. On the basis of guidelines and particular standards, an accountant can take the strategic and independent decisions for the business. The professional accountant performs end number of tasks like recording, classifying and summarizing the important financial information in the form of the income statement, cash flows and balance sheet (McPeak, et al., 2012). All these activities are important for the business and accountants needs to follow the principles of accounting standards as per the reporting requirements of the business. For e.g. International accounting standards (IAS) and Generally Accepted Accounting Principles (GAAP) is commonly follows by the many big organizations. In professional accounting profession, there has been avoidance of accounting standards by the accountants an d audit firms to hide the relevant financial information like taxation figures from the public and shareholders de (Lange and Watty, 2011). The accounting standards provide the comparability, transparency, and relevance in the financial information. An absence of this practice makes the risky situation for the investors, regulators, taxpayers and reporters. Therefore accounting standards need to apply in professional accounting so that the fair and transparent information present to the desired users. Research Aim and Objectives The aim of the research is to analyse the importance of accounting standards in professional accounting practices and how accounting standards benefit its users and overall business practices. The main objectives of the research are as follows: To analyse the importance of accounting standards To assess the impact of accounting standards on professional accounting To provide the structural framework that guides, assist and motivate accounting professionals to recognize the value of accounting standards practices. Research Questions As per the analysis of the situation and research, there are some questions has been identified to address the research topic. The questions are listed as follows: Why accounting standards are important for accounting professionals? What is the link between accounting standards and professional accounting? What are accounting standards issues faces by the accounting professional while performing their tasks? What are the effective remedies to follow the fair accounting standards practices? Literature Review From the views of Tucker and Schaltegger, (2016) the accounting profession is suffered from various instabilities and issues in the past recent years. It revealed from the reports of big four auditing firms that some companies or institutions allegedly involved in the malpractices of the accounting standards to show the high profits to attract their investors.For instance, companies which involve in these types of scandals are Enron, Vivendi universal and Dynegy. These scandals and malpractices impact the business internally and externally and it increases the demand for professional accountants which follows the fair accounting practices in their profession. The 2008 financial crisis and Satyam scam are the major examples of accounting standards malpractices to misrepresent the financial statements in a positive manner. In support of the above statement Guthrie et al., (2011) expressed that few financial scandals and issues are arisen due to avoidance of accounting standards in the reporting system. Similarly, Brooks and Dunn, (2011) argued that the too much strict rules and procedures of accounting standards are the reasons for the corporate scandals. The accounting standards are influenced by the public interest and their way of perception view the financial statements. The accountants should present the information in a professional manner so that they can achieve the highest level of performance. However, there are some organizations who involves in false accounting practices puts the pressure on accountants to aside the accounting standards and financial reporting to show the higher profits. In this type of situations, an accountant must follow the accounting standards and leave the organization or complain or report to the audit committee regarding unfair practices of professional accounting (Kotb and Roberts, 2011). Moreover, it also acknowledged that organizational success and stability is depending upon the fair decisions of the accountants. Furthermore, it also finds that the demand for the professional accountant and its services are high in the market those who adapts the fair accounting standard practices. Research Methodology (Brief) In this research, the researcher uses the qualitative and quantitative methods to undertake the research objectives significantly. Moreover, the researcher used the primary and secondary information sources to carry the research significantly. The researcher uses the survey/questionnaire method to analyse and finds the relevant data significantly. The researcher collects the sample size of 35 respondents from various organisations and online sources to evaluate the responses of respondents on the importance of accounting standards practices and how it is valuable for the accounting profession. After an evaluation from the various sources of data of the respondents, the researcher develops the key strategic approach that will overcome the issues in accounting standards and professional accounting practices. Research Chapters The research study will be distinct into five chapters as per the below-given format: Chapter 1 It gives the introduction of the research topic that includes the research background, research purpose, issues, theories and objectives of the research questions. Chapters 2- In this chapter, literature review is developed on the basis of research objectives and also discuss the importance of research topic. Chapter 3 This chapter explains the research methodology process, methods, and techniques to collect and interpret the data. Chapter 4- It provides the findings of the data which is analysed in chapter 3. Chapter 5- This is the last chapter which summarizes the research results, implications, limitations and makes insightful recommendations to the researcher for good research. Gantt Chart Task Name Start Date Finish Date Total time Project proposal 2/1/2017 7 days 1 week Literature Review 11/01/2017 15 days 2 weeks Collection of Data 01/02/2017 21 days 3 weeks Analysis of Data 02/03/2017 7 days 1 week Final Submission 13/03/2017 7 days 1 week References Brooks, L. J., and Dunn, P. (2011). Business professional ethics.UK: Cengage Learning. De Lange, P., and Watty, K. (2011). Accounting education at a crossroad in 2010 and challenges facing accounting education in Australia. Accounting Education, 20(6), 625-630. Deegan, C. (2013). Financial accounting theory.USA: McGraw-Hill Education. Demerjian, P.R. (2011). Accounting standards and debt covenants: Has the balance sheet approach led to a decline in the use of balance sheet covenants?. Journal of Accounting and Economics, 52(2), 178-202. Duff, A. (2016). Corporate social responsibility reporting in professional accounting firms. The British Accounting Review, 48(1), 74-86. Guthrie, J., Burritt, R., and Evans, E. (2011). The relationship between academic accounting research and professional practice. Bridging the gap between academic accounting research and professional practice, 9. Kaplan, R. S. (2011). Accounting scholarship that advances professional knowledge and practice. The Accounting Review, 86(2), 367-383. Kotb, A., and Roberts, C. (2011). The Impact of E?Business on the Audit Process: An Investigation of the Factors Leading to Change. International Journal of Auditing, 15(2), 150-175. McPeak, D., Pincus, K. V., and Sundem, G. L. (2012). The international accounting education standards board: influencing global accounting education. Issues in Accounting Education, 27(3), 743-750. Tucker, B. P., and Schaltegger, S. (2016). Comparing the research-practice gap in management accounting: A view from professional accounting bodies in Australia and Germany. Accounting, Auditing Accountability Journal, 29(3), 362-400.