Excerpt from Dissertation:
Ricol states in relation to the review area that “… activities were suggested in two primary areas:
1) Lowering threats to auditor self-reliance; and 2) Strengthening review quality control processes. (Ricol, 2004)
In regards to corporate administration and governance, it is related in Ricol’s speech that the task force called for corporate boards to “demonstrate increased accountability for the information, economic management and internal controls necessary to develop trustworthy information. Sound business governance procedures are especially important in emerging economies, straight impacting trader confidence and economic expansion. ” (Ricol, 2004)
Sixth is v. ACCOUNTING’S CENTRAL ROLE throughout the economy
Accounting plainly plays a central role in the economy through “building assurance in financial information and economic infrastructure. inch (Ricol, 2004) According to Ricol the accounting occupation “cannot find the money for to appear the other way and focus on capital markets in developed countries. ” (Ricol, 2004) Also stated by Ricol is that the accountancy profession needs to “reach out to nations around the world without a well established profession as they will play important roles in determining the future. ” (2004)
Ricol states that predictions had been made that approximately 95% of the population growth on the globe will take place in nations which might be yet developing and that the monetary systems during these countries may be sustained throughout the “international accountancy community operating “in collaboration with governments, regulators, analysts, development organizations funders, yet others. ” (2004)
Finally, it is known by Ricol there it is essential that “good quality accounting and auditing infrastructure” trouble the economy which this facilities have “due respect and recognition in regulatory and legal surroundings. ” (2004) Transparency in reporting is also noted to be of vital importance. This can be stated to required inch… both the knowledge at the national level, the capacity to train and continue to develop members with the profession, and the cooperation and coordination with other bodies both equally nationally and internationally. ” (Ricol, 2004)
V. Using ACCOUNTING CONCEPTS
The work of Edward D. Yingling (2008) entitled: “Improve Accounting Standards: Improve the Economy” states that “mark-to industry accounting can be contributing to concern in the markets, and it is ultimately causing misdirected open public perceptions. The misapplication of mark-to-market accounting in today’s condition, when there is no functioning market, has thoroughly destroyed immeasureable dollars in capital. inch (Yingling, 2008) Yingling says in relation to the action used recently on the part of the Securities and Exchange Commission (SEC) and Monetary Accounting Requirements Board (FASB) to address the idea of “Other Than Temporary Impairment” (OTTI) was very inadequate. ” (Yingling, 2008) the situation was tackled by the SEC who produced an attempt to discover a resolution to the issue yet , it is stated the fact that FASB’s “interpretation muddled it again. Consequently, banks may be required to take note of securities – even though there could be no menace to main or to earnings – for the reason that markets are dysfunctional. inch (Yingling, 2008)
The position of accountancy in the economy is one that is central and first to the overall market function and framework stability along with being crucial in framing the public notion of the industry in relation to capital and funding in the market. Inside the instance where market is becoming unstable it can be almost sure that the principles of accounting have grown to be shaky as well and are in a state that needs analysis and restatement of principles of accounting as well as accounting rules in placing a new path for a flailing market.
Hoggett, J. R., Edwards, L. And Medlin, L. (nd) Making decisions and the Position of Accounting. Accounting in Australia, Fifth Edition. Chapter 1 ) Online offered by http://www.johnwiley.com.au/highered/accounting/aia5e/student-res/study_guide_sampler.pdf
The Role of Accountancy in Economic Creation (2004) presented to the Un Conference in Trade and Development (UNCTAD)
Rene Ricol, President Foreign Federation of Accountants June 16, 2004.
Yinglang, Edward L. (2008)