Introduction to Problems with Standards
There is broad agreement that financial reporting standards have enhanced the quality of financial statements. However, we should be aware to the potential problems related with their use.
Some of these problems are as follows:
Standards may inhibit change
Through setting out inflexible procedures to be followed, standards might stifle the development of new and better procedures. Progress in financial reporting might need that businesses have the freedom to experiment and innovate. Except they have this freedom, accounting practice might become ossified.
Even though this problem cannot be simply dismissed, history has displayed that financial reporting standards are changed while they confirm to be inadequate or ineffective. Over the years, several standards have been either modified or withdrawn. Additionally, developing a new standard includes wide consultation with interested parties and much debate on what constitutes best practice. So, the financial reporting standards can present the stimulus for new thinking.
Standards may impose false conformity
No two businesses are similar: each will have its own features and operating methods. Through insisting on general standards, there is a risk that the unique aspects of each business will be unnoticed. Even though this argument has some advantage, it can be taken too far. Variations among businesses can be overstated and their general features understated. Additionally, there is nothing to stop standards permitting a limited choice among accounting methods that may assist in reflecting individual characteristics.
At last, a business can, in exceptional conditions, depart from an accounting standard
In which it conflicts with the need to provide a fair presentation of financial health.
So businesses do not have to fulfil with unreasonable rules.
Standards involve consensus-seeking
Financial reporting standards influence specific groups who must be wanted to accept them. Except this occurs, standards cannot be applied effectively. So, the development of standards might be affected more through the requirement to attain consensus than through technical considerations of what is the best approach to accept. While this takes place, the quality of financial statements will suffer.
So far, there is no proof to suggest this has been a main problem. Standard-setters must be responsive to the groups influenced in order to command authority. Within a democracy this is how authority is legitimised. The way that they must attain, though, is to make rules that are both technically sound and largely acceptable.
Standards can be costly
Now there is an intricate web of financial reporting standards surrounding large businesses.
The costs of conforming to these rules are high and are borne through shareholders. Each additional standard that acquires costs for businesses means that less money is presented for distribution to shareholders. There is a supposition that the advantages to shareholders of these standards outweigh their costs, but what if this is not the issue? It is reasonable to expect standard-setters to perform an assessment of costs and advantages before adding to the load of rules.
Standards can be complex
There is a rising concern that international financial reporting standards are making financial statements too difficult to be helpful to shareholders. This has led to calls for better regulation. International standards are intended to be based on principles than on legalistic rules, and this should assist to avoid excessive complexity. Though, several question whether this principles-based approach is working effectively.
Latest technology based Financial Accounting Online Tutoring Assistance
Tutors, at the www.tutorsglobe.com, take pledge to provide full satisfaction and assurance in Problems with Standards homework help via online tutoring. Students are getting 100% satisfaction by online tutors across the globe. Here you can get homework help for Problems with Standards, project ideas and tutorials. We provide email based Problems with Standards homework help. You can join us to ask queries 24x7 with live, experienced and qualified online tutors specialized in Problems with Standards. Through Online Tutoring, you would be able to complete your homework or assignments at your home. Tutors at the TutorsGlobe are committed to provide the best quality online tutoring assistance for Financial Accounting homework help and assignment help services. They use their experience, as they have solved thousands of the financial accounting assignments, which may help you to solve your complex issues of Problems with Standards. TutorsGlobe assure for the best quality compliance to your homework. Compromise with quality is not in our dictionary. If we feel that we are not able to provide the homework help as per the deadline or given instruction by the student, we refund the money of the student without any delay.
tutorsglobe.com mycoplasma hominis assignment help-homework help by online mycoplasma tutors
tutorsglobe.com thalamus assignment help-homework help by online the brain tutors
Avail hassle-free Engineering Thermodynamics Assignment Help by native tutors at affordable prices to score A++ grades.
tutorsglobe.com software designing assignment help-homework help by online software engineering tutors
tutorsglobe.com diffusion assignment help-homework help by online absorption and movement tutors
washing technique used in washing machines are pulsator technique, agitators wash technique, tumbler washing tub technique.
tutorsglobe.com viral vaccines assignment help-homework help by online viruses and cancer tutors
tutorsglobe.com renal failure assignment help-homework help by online excretion tutors
tutorsglobe.com taxes of state governments assignment help-homework help by online direct and indirect taxes tutors
sex linkages tutorial all along with the key concepts of barr body, y-linkage, sex - limited traits, sex - influenced genes and chromosomal sex determination
tutorsglobe.com etching glass assignment help-homework help by online halogen family tutors
www.tutorsglobe.com offers system fundamentals homework help, system fundamentals assignment help, case study, writing homework help, online tutoring assistance by computer science tutors.
incentives and organizations of managerial economics and key concepts of organizational architecture, relative performance, ownership, moral hazard, holdup, residual control and performance pay, answering questions of managerial economics by qualified tutors.
tutorsglobe.com facilitated application specification techniques assignment help-homework help by online requirement analysis tutors
www.tutorsglobe.com offers other configuration notations homework help, other configuration notations assignment help, online tutoring assistance, organic chemistry solutions by online qualified tutor's help.
1959108
Questions Asked
3689
Tutors
1443533
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!