Category Archives: Accounting

Accounting Standards supported by G20

G20 reinforces need for International Standard

Two weeks ago, at the G20 Summit in Toronto, Canada the 20 leaders of the highest-developed countries reiterated the need for International Accounting Standards to be used worldwide in order to strengthen the state of the global financial markets. The need for accounting standard convergence was discussed in Toronto and shows that it could improve the global financial system. International Accounting Standards (IAS) will show more transparency and comparability in the financial system.

I feel that the International Accounting Standards should be introduced worldwide as soon as possible because the convergence will enable the global financial system to find some stability. Currently the USA use US GAAP (Generally Accepted Accounting Principles) and this has proven to be a big barrier in the past. At this G20 meeting the reiteration of international standards can only mean a step in the right direction, not only for the global economy but also the accounting sector in the future. The accounting language should become standardised where all countries use IAS’s. I feel this will only help the accounting sector and eliminate the lack of comparability of financial statements, and create more transparency.

The link to the Ashdown Group article is shown below:

G20 reiterates support for accounting standards convergence

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Accountants should be more aware of bank bias

Management bias needs more attention

Accountants have been urged to pay more attention to the management bias of the banking industry. The Financial Services Authority (FSA) has said that bank auditors need to improve cooperation between themselves, banks and supervisors. Problems in the financial crisis need to be avoided in order to ensure that the future of the banking sector is transparent and to make the banks more accountable.

I feel that if the accountants and auditors’ relationship with the banks are too close, it could provide management bias. In order to provide an independent and unbiased service and opinion, the auditors need to take a more robust approach. This will enable a more transparent banking sector in the future.

With the recent collapses of banks such as the Royal Bank of Scotland (RBS), HBOS, and Northern Rock, the banking sector needed a much needed reform. The accountants can do their bit by making sure an unbiased opinion is offered and the independency in the relationship is maintained. I feel if this continues the banking industry will begin to improve as more trust will be offered by the outsider.

Below is the link to the Bloomberg article:

U.K. Accountants Should Pay More Attention to Bank Bias, Regulators Say

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Vantis suspends shares on AIM

Accounting firm fears for its future

Vantis, a top 13 UK accountancy firm has suspended its shares on the Alternate Investment Market (AIM) due to funding fears. The lack of its finances has resulted in them to withdraw from trading on AIM. The drop in revenue of its tax and advisory division has been affected due to the recession.

I feel this story could affect the accountancy industry because it shows that accountancy firms are not immune from being affected by the recession. Many may assume that accountancy and advisory firms are not affected by global financial troubles, but this story shows that all industries are affected. I feel that Vantis, a well established accounting firm, will return back to financial stability in the form of a new investor, or bank funding.

Below is the link to The Guardian article:

Shares in accounting firm Vantis suspended on funding fears  

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US moving closer to international accounting rules

International standards move a step closer in America

Yesterday, the USA moved a step closer to using International Accounting Standards. A US Securities and Exchange commission (SEC) accountant said it was important to secure funding to move towards International Accounting Standards (IAS). Currently the US use US GAAP (General Accepted Accounting Principles) to construct their financial statements and a move towards international standards would be welcomed.

I feel that it would prove a great way of standardising accounting law and provide consistency and comparability across borders. This major step towards international accounting would help the over 100 countries that use international accounting standards. I feel that if over 100 countries use international standards it shows consistency in the world’s financial language and can provide a reliable accounting future.

The case of accounting convergence between US GAAP and IAS/IFRS will enable a step towards in standardising the accounting law and can help the accountancy sector. I believe International Accounting Standards are the step forward in providing a consistent future in the financial language.

Below is the link to The Reuters article:

US seeks secure funding of global accounting board

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Gordon Brown losing Tobin tax argument

Another tax to repay the government’s losses reaching dead-end

Last weekend the G20 finance ministers met to discuss the global economic climate. Gordon Brown, the Prime Minister, proposed a new tax called Tobin Tax (or to me and you,’ Financial Transaction Tax’). It appears that the PM is losing is battle to create this tax and losing his battle to remain Prime Minister.

I believe that a new tax is not needed and not a feasible way to repay the debt that has burdened the government’s balance sheet. I feel this tax will not prevail and agree with the other G20 countries. In the article (which is linked below) it states that the PM has backing from a fund manager and states that the banks cannot assume trust to resume without significant change. However, I believe that the significant change cannot come in the form of Financial Transaction Tax. I think there are other forms of revenue for the government and Tobin Tax is not one of them.

Below is the link to the Accountancy Age article:

http://www.accountancyage.com/accountancyage/news/2252747/brown-losing-tobin-tax-argument

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