Harmonization between Domestic Accounting Standards with International Accounting Standards in Developing Countries: Empirical Evaluation

Introduction

Accounting profession seems to be the most intriguing job opportunity yet challenging in the corporate area. From the basic accounting standards to ethical professionalism, accountants are expected to bring the best characteristics that can promote the professionalism and maintain the dignity even in a competitive world of business. Accountancy exists in the corporate world not only on the available competency of the professional but also because of the standards being followed by the accountants to provide the adequate results regarding the globalization and corporate needs.

Research Background and Problem Statement

The accounting functions are continuously changes according to the challenges predicted by the influence of globalization and internationalization. In order to align all the organizational goal, competency and application of knowledge of the accountants, there is a creation of accounting standards that are being followed by the accountants to provide their corporate functions. Within the organization, the accounting reports are essential tools for the business leaders to generate sound decisions. In a deep sense, there are various accounting standards and functions that an accountant might provide towards the overall efficiency of the company. The computation and the various strategies are enclosed to those standards that are available for the accountants to use. The effectiveness of their method might vary since they are also compelled to follow the objectives of the organizations. In the long run, it can be a strong signal for the organizations effectiveness. However, the domestic accounting standards as compared to the international accounting standards should be also harmonized to guide the improvement strategies in developing countries.

Research Aim and Objectives

The aim of the study is to provide the information regarding the coordination and collaboration of domestic accounting standards and international domestic standards, with a purpose to aid the developing countries across the globe. With due respect to the accounting proficiency, there are three objectives that definitely guide the study in achieving its goal. First is to differentiate the domestic accounting standards against the international accounting standards and by determining the effectiveness of their application in an organization or country. Second is to describe the type of accounting standard that are implemented in the country. And third is to recognize the level of control in terms of professional ethics in the application of the accounting standards.

Literature Review

Accounting can be considered as a technology of control because of the intervention of accounting professional. Added to that is the existence of technologies such as software and computers to create an easy access in the organization of the transactions. In the performance of an accountant and their performance according to their function should be implemented with the level of control (Yayla, 2007). Accounting is encompassed with various transactions and sorting the items and accounts accordingly. The existence and relationships of the accounts can create a great impact towards the control with the organization and building their own competency. The provided standards include the accounting control in which might under the organizational structure, assuring that the interest of the organization are safeguarded. With the use of the standards, the accounting functions are directed to the leaders to aid them creating the decisions. All the information written and appeared on their report is believed to have a good calculation and satisfied the accounting standards. Through the deep understanding of the business corporate, the control can be given which will result in positive behavioral expectations. Accounting standards welcomes the various interventions such as the utilization of technologies for both managerial and financial accounting department and helping the accountants on their everyday tasks. The easy access on the accounting data such as the costing system is bound to follow the standards set in both domestic/international accounting and company objectives in order to relay the integrity and objectivity of the accounts (Brierley, 2004). It is already given that the accounting standards are effective only if the manager or the accountants followed the codes, rules, and/or regulations indicated and in return, can give the strategic control functions (Heeren, 2001; Tanner, 2007).

Methodology

The suggested method in the study is the comparative case studies in order to compensate the clichés created in the corporate world. The study can gain the various advantages in using the comparative case studies is the kind of method that can be used concerning the samples of studies particularly in accounting for there are bountiful of ideas and issues concerning the corporate practice and application of standards. By looking on the previous studies, the researcher/s can discover the various literature gaps with the accounting standards used in various areas.

References:

Brierley, J., (2004) “An Examination of the Costing Process in a Technology Center: Lessons for Management”, International Journal of Management, Vol. 21, No. 1.

Heeren, A., (2001) “Management Accounting for Sustainable Development”, Accessed 10 June 2010, from http://www.p2pays.org/ref/26/25585.pdf

Tanner, D., (2007) “Comparison of Management Accounting and Financial Accounting”, Introduction to Managerial Accounting, Accessed 10 June 2010, from http://www.unf.edu/~dtanner/dtch/ch1.pdf

Yayla, H., (2007) “Accounting and Language”, Accessed 10 June 2010, from http://www.cf.ac.uk/carbs/conferences/abfh07/yayla.pdf