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Effect of Accounting’s Perfect Storm
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Effect of Accounting’s Perfect Storm
Question a
The accounting’s perfect storm describes a combination of three elements, which have the potential of altering dramatically the financial reporting of both non-public and public companies. The three elements entail: the adoption of International Financial Reporting Standards (IFRS) by public companies; the introduction of major GAAP revisions to private companies and reformatting of financial statements. Different agencies are responsible for driving each initiative (O’Brien 2). The adoption of the IFRS is the responsibility of the Securities and Exchange Commission (SEC) while the driving of GAAP revisions is the responsibility of the American Institute of CPAs (AICPA) and the Financial Accounting Foundation (FAF). On the other hand, the Financial Accounting Standards Board (FASB) has the responsibility of reformatting financial statements.
A public company adopting to the IFRS changes will be necessary since the adoption comes with benefits. This will be necessary for a public company to adopt the IFRS in order to be capable of presenting its financial statements as other foreign competitors (O’Brien 6). Presenting financial statements as other foreign companies is vital for a public company since it can easily compare its performance with other foreign companies. Besides, companies having subsidiaries in countries that allow IFRSwill be capable of using one accounting language throughout the company (Kirk 32). It will also be necessary for a public company to convert to IFRS in case it is a subsidiary of a foreign country, which must use IFRS, or if it has a foreign investor which must use IFRS (O’Brien 7). In addition, because of the growing need of companies to invest abroad, it will be necessary for companies to adopt the IFRS. Therefore, it is exceedingly vital for companies to adopt to the IFRS.
It is necessary to drive the GAAP revisions since it would simplify the financial reporting for private companies. Through following GAAP the reporting of some financial processes takes a long process; however, with the revisions to GAAP, it will be feasible to shorten the processes leading to the simplification of financial reporting. It will also be necessary to consider GAAP revisions since it will lead to cutting of costs; especially for corporations that are multinational. Most multinationals using GAAP are usually required to file using multiple systems; however, with the revision of GAAP, such multinationals may be required to file only under one system. This will help in mitigating costs for the multinationals. In addition, it will be necessary to drive the GAAP revisions in order to make financial accounting reporting process become more efficient (O’Brien 9). This emanates from the elimination of accounting processes that may not be recognized as efficient.
Although the accounting’s perfect storm suggests reformatting of the financial statements, it does not seem necessary to do so. According to the proposed changes, the balance sheet, income statement and the statement of cash flows reclassify liabilities, revenues, assets and expenses into investing, financing and operating categories. Besides, fresh terms such as business income and business assets appear. In addition, the balance sheet becomes established as the statement of financial position while the income statement is established as the statement of comprehensive income. Furthermore, there is a proposal of abandoning the indirect technique of preparing operating cash flows. This reformatting is not necessary since it does not have any benefit or change to the financial statements. If adopting the change could be of an advantage to the financial reporting, then it could be deemed necessary; however, it is not advantageous and thus not necessary.
Question b
The changes brought about by the accounting’s perfect storm are likely to affect the careers of financial statement preparers, Certified Public Accountants, and auditors. The careers of these experts will be affected since they will require to familiarize themselves with the proposed changes in the financial reporting. For example, the adoption of IFRS will require the professionals to learn what accounting aspect is added or eliminated by adopting the IFRS. This implies that the accounting experts have to attend extra classes in order to familiarize themselves with the changes. Other experts engaged in the management in the measurement of certain liabilities and assets, such as valuation and actuaries experts, will require to undertake a comprehensive training because they do not learn IFRS. Besides, the changes will affect the accounting career since I will have to understand how the financial statements differ, when prepared using the GAAP, IFRS and revised GAAP. This will be crucial so as to be prepared to work in any accounting environment.
Conclusion
The accounting’s perfect storm refers to a combination of three elements that have the probability of altering the financial reporting of both non-public and public companies. The three elements include: the adoption of International Financial Reporting Standards (IFRS) by public companies; the introduction of major GAAP revisions to private companies and reformatting of financial statements. The changes emanating from the first two elements is deemed necessary since they have some benefits; however, reformatting of financial statements is not necessary since does not seem to affect the financial reporting.
Works Cited
O’Brien, F.Williams. Accounting’s Perfect Storm. Santa Clara University: Executive Education, Inc. Print.
Kirk, Robert. Ifrs: A Quick Reference Guide. Oxford: CIMA, 2009. Print.
Effect Of Accountings Perfect Storm
Effect Of Accounting’s Perfect Storm
Question a
The accounting’s perfect storm describes a combination of three elements, which have the potential of altering dramatically the financial reporting of both non-public and public companies. The three elements entail: the adoption of International Financial Reporting Standards (IFRS) by public companies; the introduction of major GAAP revisions to private companies and reformatting of financial statements. Different agencies are responsible for driving each initiative (O’Brien 2). The adoption of the IFRS is the responsibility of the Securities and Exchange Commission (SEC) while the driving of GAAP revisions is the responsibility of the American Institute of CPAs (AICPA) and the Financial Accounting Foundation (FAF). On the other hand, the Financial Accounting Standards Board (FASB) has the responsibility of reformatting financial statements.
A public company adopting to the IFRS changes will be necessary since the adoption comes with benefits. This will be necessary for a public company to adopt the IFRS in order to be capable of presenting its financial statements as other foreign competitors (O’Brien 6). Presenting financial statements as other foreign companies is vital for a public company since it can easily compare its performance with other foreign companies. Besides, companies having subsidiaries in countries that allow IFRSwill be capable of using one accounting language throughout the company (Kirk 32). It will also be necessary for a public company to convert to IFRS in case it is a subsidiary of a foreign country, which must use IFRS, or if it has a foreign investor which must use IFRS (O’Brien 7). In addition, because of the growing need of companies to invest abroad, it will be necessary for companies to adopt the IFRS. Therefore, it is exceedingly vital for companies to adopt to the IFRS.
It is necessary to drive the GAAP revisions since it would simplify the financial reporting for private companies. Through following GAAP the reporting of some financial processes takes a long process; however, with the revisions to GAAP, it will be feasible to shorten the processes leading to the simplification of financial reporting. It will also be necessary to consider GAAP revisions since it will lead to cutting of costs; especially for corporations that are multinational. Most multinationals using GAAP are usually required to file using multiple systems; however, with the revision of GAAP, such multinationals may be required to file only under one system. This will help in mitigating costs for the multinationals. In addition, it will be necessary to drive the GAAP revisions in order to make financial accounting reporting process become more efficient (O’Brien 9). This emanates from the elimination of accounting processes that may not be recognized as efficient.
Although the accounting’s perfect storm suggests reformatting of the financial statements, it does not seem necessary to do so. According to the proposed changes, the balance sheet, income statement and the statement of cash flows reclassify liabilities, revenues, assets and expenses into investing, financing and operating categories. Besides, fresh terms such as business income and business assets appear. In addition, the balance sheet becomes established as the statement of financial position while the income statement is established as the statement of comprehensive income. Furthermore, there is a proposal of abandoning the indirect technique of preparing operating cash flows. This reformatting is not necessary since it does not have any benefit or change to the financial statements. If adopting the change could be of an advantage to the financial reporting, then it could be deemed necessary; however, it is not advantageous and thus not necessary.
Question b
The changes brought about by the accounting’s perfect storm are likely to affect the careers of financial statement preparers, Certified Public Accountants, and auditors. The careers of these experts will be affected since they will require to familiarize themselves with the proposed changes in the financial reporting. For example, the adoption of IFRS will require the professionals to learn what accounting aspect is added or eliminated by adopting the IFRS. This implies that the accounting experts have to attend extra classes in order to familiarize themselves with the changes. Other experts engaged in the management in the measurement of certain liabilities and assets, such as valuation and actuaries experts, will require to undertake a comprehensive training because they do not learn IFRS. Besides, the changes will affect the accounting career since I will have to understand how the financial statements differ, when prepared using the GAAP, IFRS and revised GAAP. This will be crucial so as to be prepared to work in any accounting environment.
Conclusion
The accounting’s perfect storm refers to a combination of three elements that have the probability of altering the financial reporting of both non-public and public companies. The three elements include: the adoption of International Financial Reporting Standards (IFRS) by public companies; the introduction of major GAAP revisions to private companies and reformatting of financial statements. The changes emanating from the first two elements is deemed necessary since they have some benefits; however, reformatting of financial statements is not necessary since does not seem to affect the financial reporting.
Works Cited
O’Brien, F.Williams. Accounting’s Perfect Storm. Santa Clara University: Executive Education, Inc. Print.
Kirk, Robert. Ifrs: A Quick Reference Guide. Oxford: CIMA, 2009. Print.
EEOC Case Study, Employment Acts and Laws
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EEOC Case Study, Employment Acts and Laws
Part 1: Legal Case Analysis, Colello vs Bayshore
The involved parties were Doris Colello, who was also the plaintiff and Ariel Solis of Bayshore Community Health Services as the defendant. The action was brought by Doris Colello who filed a suit for sexual harassment. The case originated in Superior Court of New Jersey, Appellate Division. Ariel Solis, the defendant won the trial at the court level. The defendant was accused of making sexual advances towards the plaintiff. He started by making several advances verbally and after the plaintiff turned them down, he organized a meeting in which he forcefully kissed her on the cheek and then requested for an affair. When the plaintiff made efforts to escape, the defendant grabbed her and kissed her forcefully, then smiled and informed her that it was not over yet.
The relevant facts as defined by the court were that two incidences of sexual harassment had occurred and were deplorable as well as disgusting. Another fact was that Bayshore was not to be accused and even if Solis’ behavior was severe and pervasive, the former could not be judged in the court of law as Solis was just its employee. The precise issues that were being litigated in this respect were that Solis activities did not satisfy the standards required for them to be considered characteristic of a hostile environment. The fact that I would like to know and were not included in the opinion but which could be equally imperative includes the policies governing work ethics and employee conduct at Bayshore.
The precise issue being litigated as defined by the court included Bayshore’s hostile work environment, sexual harassment complaints and assault, battery and infliction of emotional distress and pain by the defendant. I do not agree with the way the court framed this because it omitted important aspects pertaining to aggression and the rejection and the opposition that was exhibited by the plaintiff.
The court dismissed the case on the premise that irrespective of the defendants activities having been disgusting and relatively deplorable, they were not severe and pervasive to the extent of attracting an action under the New Jersey Law Against Discrimination 10:5-1 to -49;2. In addition, the court indicated that Bayshore could not be judged as it was the employee and not the institution that participated in the illegal activity.
I do not agree with the court on this decision because the defendant exhibited some degree of aggression towards the plaintiff which was not deterred by rejection. In addition, these actions could be perceived to be threatening. The courts decision was that the respective activities could not meet the standards required to qualify this as a hostile environment (Langslow, 2006). This was based on the fact that the inherent facts in this regard needed to be always perceived in light of gender-specific standards. I do not agree with this rationale because it undermines the judgment of certain cases whose activities constitute violence but which do not meet the established standards.
This has far reaching implications on the health sector as it implies that nurses are likely to continue suffering harassment in the hands of physicians. Further, it becomes difficult to hold the institutions responsible because the physicians are merely their employees. To address this, the healthcare needs to devise measures that would make the health institutions responsible for the activities of their employees (Bender & Finnis, 2005). This would ensure that the respective employees take caution. If the case could have been decided differently, incidences of harassment of nurses in the health care system would be minimal. It is because viable measures would have been undertaken to counter the scenario.
Part 3:
It is certain that sexual harassment at the work place undermines employee performance and may have severer implications in the long run. As a manager in this regard, I would take time to investigate the matter and have all facts and issue about the complaint. Having these facts would give me a ground to warn the problematic employee and remind him about the work place policies regarding sexual harassment. Then, I would advise the female employee to file an official complaint if the behavior persists. This would then enable me to take a legal action against the offensive employee.
Response to John
It would be important to investigate the matter in order to determine if the alleged offensive activities are welcome or not. It is also a good idea to inform and or remind the employees about the policies governing work ethics and the work place to enable them make informed decisions.
References
Bender, P. & Finnis, J. (2005). Sexual Harassment in Nursing. Journal of Advanced Nursing, 25, 163-9
Langslow, A. (2006). Dealing with Sexual Harassment. Australian Nursing Journal, 3, 32-6.
Madison, J. (2007). Experiences of Sex Based harassment. Australian Journal of Advanced Nursing, 14, 29-37.