Advantages And Disadvantages Of Using Accounting Standards

Published: Last Edited:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

Accounting standards are the needs of the financial statements will fairly and consistently describes the financial performance. As the users of financial statements need to learn the rules of accounting of each company, and comparisons between the companies will be difficult. Accounting standards used today is referred to generally accepted accounting principles. And generally accepted principles because there is a formal body, put them or the accounting profession widely accepted them when appropriate. The study of the practices of accounting standards is an important issue relevant to the good management of companies in the current environment, and are displayed with the standards card technology to the call for accountability and better financial reporting, or as a reflection of society that is changing the expectations of corporate conduct social and political monitoring and control of the project.

2) Accounting reports:

Is a periodic accounting report which presents the financial position of the facility, and documents with other important information about business and works as an accountant in the report and document expenses of companies and crop. Can be found on the accounting reports used to develop the document and the progress of the company in the development of codes of conduct for staff accounting and finance.

3) Accounting framework:

Accounting framework is to contribute effectively in the configuration of Accounting This would enable him to understand the relations located between applications and diagnose problems in the preparation of financial statements, and also increases the frame of the degree of understanding of the theory and contribute significantly to the success of the process of accounting practice as career

4) The advantages and disadvantages of using the accounting:

There are standards and there are advantages and disadvantages of different using accounting standards in companies, and here we can consider some of the advantages of using accounting standards, which are fast and efficient information processing and automatic generation of accounting documents such as invoices, networks, and the balance sheet, and allow a reduction in the cost of hardware and software and the availability of easy software package accounting, and also from the advantages that they are able to guide processing of more than all the data is published automatically to the books of different accounts and many kinds of useful reports can be generated for management decision-making. and disadvantages of using accounting standards power failure, computer viruses and hackers are the problems inherent in the use of the systems computing , and just the data entry has been in the system automatically output is obtained the data and is being entered, as it requires to validate the accuracy and completion, and also from defects in accounting, it was not set correctly to meet the business requirements for software programmed bad or inappropriate and, finally, the risk of fraud if the appropriate level of surveillance and security, both internal and external are not correct.

Schipper states that most standards drafted by the FASB are principles-based.  “Principles-Based Accounting Standards,â€Â Accounting Horizons, March 2003, pp. 61-72.

5) Why we need using the accounting:

Need for companies of all sizes need to implement the accounting system to simplify and report business transactions, tracking invoices and reduce problems with the tax authorities, where they are coordinating the return of the accounting procedures by the Coalition Provisional Authority or the Director of Finance who are responsible for the registration of all incoming and outgoing transactions, and keep records of and coordinated the creation of financial statements At the end of each financial period, and the need for accounting firms also how to make a commercial profit of the company and the company needs to form a good job and won a good model. Since long used accounting to help managers understand the costs of business management and decision-making, where most of the costs incurred by the modern business accountants call the variable costs as they vary directly with the amount of production and spending money on labor and raw materials and energy to run the factory or company, and so in direct proportion to production. Can simply use the total variable costs to use the product as evidence of a rough decision-making processes.

6) Who the business can do without accounting:

To achieve success in the business world is difficult and especially if they were not very familiar with the strategies of the various that have the need to make a successful business, where financial accountability is the work needed to request assistance with a separate department or outsourcing is needed if you run a business on a large scale, and there Many well-known companies that lead the financial accounting excellent. Use of the military's real dedicated, experienced staff of such companies have the ability to deal with different financial accounts, and participate in bookkeeping and income tax services. Benefits of outsourcing and financial accounting and assists in every aspect of business, and this is why there is a significant increase in the number of business owners and entrepreneurs opening up to the idea of outsourcing work.

7) Comparison between companies of Oman and the world in terms of accounting standards:

The economy of Oman a number of conventions which led to a more market-oriented economy and, in particular the momentum financial contribution made by the Sultanate of Oman has made the beginning of a positive direction and size of the industry of Oman has become much bigger and expectations of the parties designated different that can only be achieved through good management of companies where The corporate governance to ensure better performance of companies and have a better relationship with the owners of investors in the proper exercise of accounting standards that lead to effective detection and good management software company and thus the practice of the accounting standards of sound is an issue more important than the good corporate governance in the era of competitiveness as a criteria to provide a mechanism useful for restructuring the core values of companies and this commitment common accounting standards and proper, and reduce the discretion of the standards, and promotes inequality is not only to the degree of transparency in the exchange of information with interested parties, but also more widely promote the role of managers need to play to achieve the objectives of the company in the midst of challenges and adversity .

Where some companies maintain the world's great growth as a player in a market in foreign investment it needs to constantly updated business practices and also these companies achieved great success to a market economy as full members. Long called financiers and investors in different parts of the world to achieve harmony between the accounting standards in all parts of the world so as to compare companies on equal opportunities. Although this is unlikely to be fully realized in the short term, the accounting reforms mark a remarkable step towards unification, and will help investors to become more confident in their decision.

Nobes, C.W. and Parker, R., Comparative International Accounting, Prentice-Hall, Sixth Edition, 2000.

8) Conclusion:

The Middle-East countries to a large extent have welcomed the International Accounting Standards. Some countries consider these standards as a replacement for their domestic standards, while others accept IAS financial statements from foreign companies for listing purposes in the stock exchanges. A few countries require even the domestic listed companies to follow IASs.The national standards of some countries are either based on or similar to IASs even though they may not have adopted IASs. Only two Middle East countries, Iran and Israel, showed reluctance to the use of IASs. The number of listed companies for the majority of the Middle East Stock Exchanges is small as compared to the stock exchanges of the Western countries. The number of foreign listed companies in most of these stock exchanges is negligible, which means that the degree of internationalization is very low or nonexistent. However, in the opinion of the authors, the experiment is in the early stage to draw a conclusion and it is expected that the adoption of the International Accounting Standards may attract foreign companies in the future.