Issues of ethics, regulation, compliance and the extent to which they are constraints or threats to the organization.

Issues of ethics, regulation, compliance and the extent to which they are constraints or threats to the organization. 

 

What is an Accounting Standard

Accounting standards increase financial reporting's openness across the board. The commonly used set of accounting standards for creating financial statements in the US is known as generally accepted accounting principles (GAAP). The International Accounting Standards Board (IASB) has established the International Financial Reporting Standards (IFRS), which are used by international businesses that report financial accounts and are not subject to U.S. GAAP.

In the United States, both public and private institutions frequently apply widely accepted accounting standards. Most of the rest of the world employs IFRS. The use of these standards is needed by multinational organizations. When creating financial statements, the International Accounting Standards Board (IASB) creates and interprets the accounting standards used by the various international communities. All facets of an entity's financial picture, including its assets, liabilities, income, outlays, and shareholders' equity, are covered by accounting rules. Revenue recognition, asset classification, permissible depreciation methods, what qualifies as allowable depreciation, lease classifications, and outstanding share measurement are a few instances of specific accounting rules (Opperman, 2009).

 

In the 1930s, the New York Stock Exchange and the American Institute of Accountants, which is now known as the American Institute of Certified Public Accountants, attempted to introduce the first accounting standards. The Securities and Exchange Commission was established as a result of this endeavour, which was followed by the Securities Act of 1933 and the Securities Exchange Act of 1934. The Governmental Accounting Standards Board has also produced accounting standards for all state and municipal governments' use of accounting principles. Accounting standards define the timing, measurement, and presentation of economic events. Accounting standards make sure that pertinent information is given about the firm to external entities including banks, investors, and regulatory bodies. These technical declarations have established the parameters for financial reporting measures and guaranteed reporting transparency (Opperman, 2009).

What Are International Accounting Standards (IAS)?

The Worldwide Accounting Standards Committee (IASC), established in 1973, published the first international accounting standards under the name International Accounting Standards (IAS). Making it simpler to compare businesses globally, boosting financial reporting's transparency and credibility, and promoting international trade and investment were the objectives back then, as they are today (Roger Hussey, 2005).

 

Globally comparable accounting standards encourage openness, responsibility, and effectiveness in all financial markets. This optimizes capital allocation and enables investors and other market participants to make well-informed financial decisions about investment opportunities and dangers. Additionally, universal standards dramatically lower the expenses associated with reporting and regulatory compliance, particularly for businesses that have subsidiaries and foreign operations.

 

International Financial Reporting Standards (IFRS), which have now been accepted by the majority of the world's major financial markets, replaced International Accounting Standards (IAS), a set of regulations for financial statements, in 2001. The International Accounting Standards Board (IASB), an impartial organization with headquarters in London, released both sets of standards.

 

The IFRS are not used in the United States. Instead, public firms in the United States are required to adhere to Generally Accepted Accounting Standards by the U.S. Securities & Exchange Commission (GAAP). Japan and China both decided against adopting IFRS (Roger Hussey, 2005).

What exactly are SLA Standards?

The term "service-level agreement" (SLA) refers to a legal agreement between a service provider and its clients that outlines the services they will deliver and the service standards they are required to uphold. A service-level agreement (SLA) outlines the degree of service that a client expects from a supplier, the metrics used to measure that performance, and any penalties that may be imposed if the agreed-upon service standards are not fulfilled. SLAs can exist between two departments inside a firm, although they typically exist between businesses and outside suppliers. (CIO, 2017)

·         For example, a telecom company's SLA might guarantee network availability of 99.999 percent (for the mathematically challenged, that equates to about five and a half minutes of downtime per year, which, believe it or not, can still be too long for some businesses), and it might also allow the customer to reduce their payment by a specific percentage if that goal is not met, typically on a sliding scale based on the severity of the breach.

What are IFRS Standards?

The International Accounting Standards Board (IASB) created and maintains a set of accounting rules known as International Financial Reporting Standards (IFRS) (IASB). With the help of these standards, businesses can produce and display their financial statements in a way that makes them transparent, comparable, and clear to all users of financial information around the world.

More than 140 nations, including the European Union, Australia, Canada, and China, employ IFRS Standards, and many more are progressively adopting them.

They cover a wide range of accounting subjects, such as accounting for leases, inventory valuation, financial statement presentation, and revenue recognition.

 

The primary goal of IFRS Standards is to establish a common language for business transactions so that investors, analysts, and other stakeholders may more easily comprehend financial data from various nations and industries. Companies can increase openness, comparability, and accountability by adopting IFRS Standards, boosting investor trust and fostering economic growth (Ruth Picker, 2019).

 

Statutory framework for accounting

The statutory framework for accounting is the laws, rules, and guidelines that specify how businesses should produce and display their financial accounts.

These regulations guarantee that financial data is accurate, trustworthy, and beneficial to creditors, investors, and other stakeholders (ALEXANDER, 2013).

The following are the main elements of the legal framework for accounting

1.      The collection of norms and regulations known as generally accepted accounting principles (GAAP) are what businesses must adhere to when creating their financial statements. GAAP has rules, hypotheses, and norms that ensure uniformity and comparability among various companies and industries.

2.      The International Accounting Standards Board (IASB) created a set of accounting rules known as International Financial Reporting Standards (IFRS), utilized in numerous nations worldwide. A standard language for financial reporting is what IFRS intends to provide, making it more straightforward for businesses to transact business internationally.

3.      Regulations of the Securities and Exchange Commission (SEC) The United States securities markets are regulated by the SEC, an organization within the government. For businesses that issue securities, including publicly traded companies, the SEC can establish accounting and financial reporting rules.

4.      Tax rules: Businesses must also abide by the applicable tax regulations when generating their financial statements. Tax rules specify how businesses must report their earnings, outlays, and tax obligations to the government.

(ALEXANDER, 2013)

In general, the statutory framework for accounting gives businesses a foundation for producing financial statements that are precise, trustworthy, and beneficial to stakeholders. By adhering to these guidelines, companies can gain the confidence of creditors, investors, and other stakeholders. This will make it easier for them to get cash, grow their operations, and eventually expand their enterprises.

 

International financial reporting standards

The International Accounting Standards Board (IASB) created a set of financial reporting accounting rules known as the International Financial Reporting Standards (IFRS). Companies all throughout the globe compile and display their financial statements by IFRS, which makes it simpler for investors and other stakeholders to evaluate the financial performance between various businesses and nations.

 

Accounting standards in IFRS cover a wide range of subjects, including presenting financial statements, revenue recognition, leases, financial instruments, and more. The guidelines provide instructions on how to gather and present financial data uniformly and openly.

 

Almost 144 countries and regions have adopted IFRS, including the European Union, Australia, Canada, and India. However, other nations, including the United States, continue utilizing their accounting principles, such as Generally Accepted Accounting Standards (GAAP) (ALEXANDER, 2013).

 

Sustainability governance

To fulfil the demands of the present without jeopardizing the capacity of future generations to meet their own requirements, businesses must use management and decision-making procedures known as sustainability governance.

 

Integrating sustainability concerns into an organization's strategy, policies, operations, and culture is a common aspect of sustainable governance. Establishing sustainability objectives, monitoring and reporting on performance, including stakeholders, and managing risks associated with sustainability concerns like climate change, resource depletion, and social inequity are a few examples of what this may include.

 

Collaboration between all parties, including workers, clients, suppliers, investors, regulators, and local communities, is necessary for effective, sustainable governance. It also needs a long-term viewpoint, an awareness of systemic problems, and a dedication to ongoing development. Organizations may improve their reputation, lower risks, boost resilience, and generate value for all stakeholders by establishing robust, sustainable governance (Meuleman, 2014).

 

What is corporate governance?

Corporate governance refers to guidelines, customs, and procedures that regulate and control a business. It includes all the internal and external variables that affect how a company runs and conducts its business, including its interactions with shareholders, clients, staff members, vendors, and other stakeholders.

 

Corporate governance's primary goals are to safeguard a company's operations' accountability, transparency, and integrity and safeguard its stakeholders' interests. This is often accomplished by establishing distinct lines of authority and responsibility, implementing efficient risk management plans, implementing ethical and morally sound corporate practices, and encouraging shareholder participation.

Corporate governance is crucial to a company's long-term viability and performance. A company's reputation can be improved, investors can be drawn in and kept, and a culture of moral and responsible behaviour can be fostered with a solid and efficient corporate governance system (Robert A. G. Monks, 2004).

 

What is Tax Act?

TaxAct is a tax preparation software provider that offers services for tax professionals, small businesses, and private taxpayers. With its corporate headquarters in Cedar Rapids, Iowa, the company was established in 1998.

 

Users of TaxAct's selection of online tax preparation solutions can electronically file their federal and state income tax returns. They provide a free edition for straightforward returns, a deluxe version for more complicated returns, and a self-employed version for independent contractors and freelancers.

 

In addition, TaxAct provides tools for tax planning, audit support, and a promise that users will get the largest refund possible. Everyone who needs to file their taxes can utilize the company's tax filing solutions because they are designed to be reasonably priced, simple to use, and available (Robert A. G. Monks, 2004).

 

Different types of taxation

Taxation is the process through which a government or other authorized entity levies and collects taxes from people and organizations. Governments levy many different kinds of taxes, and there are several methods to categorize them. Following are few of the most prevalent taxes types.

 

ü  Income Tax

Income taxes are levied against both people and enterprises. According to the amount of income, it is often computed as a percentage of the total income produced, and the rate may change.

ü  Sales Tax

A tax levied on the sale of goods and services is known as a sales tax. It is often estimated as a percentage of the cost of the products or services and is paid to the government by the seller after being collected.

 

ü  Property Tax

Tax on the value of real estate or other properties that are owned by people or businesses is known as a property tax. It is often based on the property's assessed value and is gathered by local governments.

 

ü  Excise tax

This is a tax on particular products, such cigarettes, alcohol, fuel, and high-end goods. It is often paid for by the seller or manufacturer and is included in the product price.

ü  Tax on capital gains

A profit made through the sale of assets like stocks, bonds, and real estate is subject to this tax. It is often determined by subtracting the purchase price from the sale price.

ü  Estate tax

A charge levied on the transfer of property following a person's passing. It is often computed using the estate's worth and paid by the estate before the heirs get anything.

ü  Corporate tax

A charge on the money that firms make. It is frequently determined as a portion of the company's earnings and is funded by the business.

ü  Payroll tax

A charge placed on the employee's pay and salary. Usually, the employer deducts it and sends the money to the government.

ü  Tariffs

Tariffs are a charge on imported products imposed with the goal of supporting domestic industry and bringing in money for the government.

(Frecknall-Hughes, 2014).

 

Each nation and jurisdiction have different tax laws and rates.


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