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ACC620 Contemporary Issues in Accounting Assignment Solution
Accounting plays a very important role in the success of an organization. As a result many researchers have been conducted in order to study the importance of accounting in organizations. With the advent of modern dynamics in accounting many new issues has attracted the attention of these researchers in order to evaluate the issues and find the best possible solutions to deal with these issues in a strategic manner. These issues impose challenge on the accountant’s profession and as a result it has received huge attention in the accountancy field [ CITATION Dar18 \l 1033 ]. Coke Amatil was established in the year 1904 [ CITATION Coc18 \l 16393 ]. The company gives a lot of importance to its customers and other stakeholders of the organization. The organization releases its financial reports in the annual reports of the organization behaviour on a yearly basis. These financial reports are used by its stakeholders to take decisions especially by the investors of the company. Hence, it becomes very important to present the organization in the best possible manner that reflects that the company is abiding all the standards and is complying with all the regulatory norms. In order to ensure that financial reports are true to its sense and are free from any misstatements Coke Amatil has opted for independent auditing within the firm. Many changes have been taken place in the contemporary accounting world and hence, new challenges are being faced by the auditors of Coke Amatil [CITATION CCA17 \l 1033 ]. The following report has majorly focused on the contemporary issues taking place in accounting and how it impacts the accountants as well as Coke Amatil.
The contemporary issue in accounting - Corporate Governance
With the increasing knowledge and curiosity of the stakeholders of the business many new changes and challenges has taken place in the field of accountancy. One of the most important critical issues being faced by accountancy is related to corporate governance. All the other accounting issues like adopting or complying with the regulatory norms, deciding over mandatory or voluntary disclosure of the financial information are directly or indirectly related to this issue. Many regulatory norms and framework has been developed that forces the accountants as well as organizations to adopt these frameworks and regulations [ CITATION Mar09 \l 1033 ]. The direct impact of this is seen on the accounting pattern and system adopted by the Coke Amatil. The main challenge that is faced by the accountants of Coke Amatil is to develop a blend of the external regulations and the organizational culture. Organizational culture plays a very important role in the accountancy field. The employees of the company and different departments and their heads form an integral part of the organizational culture. Hence, their involvement in the compliance with the regulations becomes very difficult in the starting phase and if any changes occur in the regulatory norms. In order to develop the financial reports of the company the accountants of Coke Amatil need to closely coordinate with the human resources of the company and hence, it becomes very important to make them work according the accounting standards and compliances. This is important because it has a direct impact on the preparation of financial statements and reports. Hence, a change or the adoption of an accounting regulatory norm has a chained impact on different departments of the company. Hence, it becomes very important for the accountants of Coke Amatil to take into consideration all these factors so that its negative impact does not fall on the financial performance of the Coke Amatil. Accounting is a very important function and as a result it is very important to consider the environmental factors of while undertaking the accounting activities of the organization. Many times it is difficult to adopt the international regulations as it may not match with the current accounting practices of the company. Hence, it imposes serious challenges in front of the accountants. Though, it is believed that it offers many opportunities as well like it offers flexibility in the decision making process of the different stakeholders group of the company. This provides competitive edge to the company. It has been believed that with the help of this the quality of the accounting information disclosed is improved also efficiency is experienced in the accounting activities of the business[ CITATION Bar151 \l 1033 ].
Another major contemporary issue that is being faced in accountancy is related to the disclosure of non-financial information along with financial information which is again linked with corporate governance. With the advent of CSR activities the need to reflect the non-financial information in the reports of the company has increased and hence, it has increased the roles and responsibilities of the accountants towards the organization creating an issue in front of them. This is so because; apart from financial standards the accountants now need to work with the non-financial standards and regulations. Because of the increasing concern of the stakeholders towards the society and environment it has become a moral obligation along with professional obligation of the organizations to disclose their efforts taken towards the betterment of the society and to protect the environment [ CITATION Nik17 \l 1033 ].Hence, this has increased the work pressure of the accountants to measure this non-financial information and reflect them along with the financial reports of the company. Another issue related to this is that it requires compliance with the national as well as international norms and regulations which imposes a challenge in front of the accountants. This is so because the organizational culture differs from organization to organization hence, it becomes a challenge to comply with the international norms if the company is not in that position. And if the company fails to comply with these norms then it may negatively impact the competitiveness of the company[ CITATION ?er17 \l 1033 ].Also the changes in international regulations facilitate the adoption of these changes in the organizational culture. Hence, this further aggravates the situation. Carbon accounting is one of the major accounting issues being faced by accountants in today’s world. Carbon accounting involves the measurement as well as reporting of the greenhouse gas emissions by the company in a specific period. In order to deal with this issue carbon accounting framework and methodologies needs to be developed by the accountants. It is argued by some experts that this deflects the attention of the accountants from their main activity [ CITATION Tan18 \l 1033 ]. Though, it is believed that because of the disclosure of non-financial information the quality and performance management of the organization is positively impacted. This is the main reason that the accountants give important emphasis to the disclosure of the non-financial information in their annual reports.
Disclosure of the financial information is also an important issue in accountancy. This issue is related to the corporate governance of the company and its impact on accountancy. This is so because it has been seen that many managers use their discretionary power to voluntarily disclose the financial information in the annual reports [ CITATION Int11 \l 1033 ].This has created a huge issue in the accounting world. This is so because the stakeholders of the organization like the employees, shareholders, investors as well as customers largely rely on the financial information of the company to take their decisions. Hence, because of the adoption of voluntary disclosure an asymmetry is observed between the owners, the accountants and the managers of the organization [ CITATION Hen15 \l 1033 ].The decision regarding the mandatory or voluntary disclosure of the financial information should be taken on the basis of the organizational culture as well as on the basis of the demands of the stakeholders of the company. The disclosure of the financial information has a direct impact on the market value of the share price. The method of disclosure adopted by the organization reflects the leadership of the company and its coordination with the accounting department of the company[ CITATION Adi18 \l 1033 ].
In the end, it can be concluded that with the advent of advancements in the modern accounting standards and conceptual frameworks, many new issues has arisen in front of the accountants and organizations. The main challenge is related to its compliance and the need for changes in the organizational structure and culture because of the same. In order to deal with these issues, the accountants should take efforts to merge the international standards with the organizational structure. The decision that disclosure should be mandatory or voluntary should be based on exploring both the ways and analysing the response of different stakeholders of the organization. The non- financial information will help the organization to increase their competitiveness and hence, it is recommended to the accountants that they should comply with the required norms in order to disclose the non- financial information.
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