Accounting Challenges of IFRS and GAAP | Report

Added on - 02 Feb 2020

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CHALLENGES OFACCOUNTING INGLOBALORGANISATIONS
Table of ContentsINTRODUCTION...........................................................................................................................1MAIN BODY...................................................................................................................................1CONCLUSION................................................................................................................................5REFERENCES................................................................................................................................6
INTRODUCTIONChallenge plays a significant role in an entity as it inspires an entity in order to overcomeall the challenges faced by an entity by increasing their strength. Current strength of an entity isessential in order to beat all the customers. This report is also accounting challenges faced by anentity which will includes IFRS and GAAP.MAIN BODYAs per the views ofParker and Guthrie, (2017)accounting is a process under whichvarious financial data and transactions are to be recorded and then different financial statementsare to be prepared for assessing business performance in the industry. There are mainly two typesof the accounting systems are to be used for each and every business entity which are like asmanagement accounting and financial accounting. On the basis of such kinds of accountingsystems are approaches there are company able to take internal as well as external businessdecisions which are necessary for the firm. While preparing the financial accounts andstatements there are several kinds of practices, standards and accounting theories are used andadopted. Such kinds of practices differ from the country to country and affects to the companywhich operates at the global level. Because the firm has to follow accounting standards of everycountry which is a big challenge for it. To overcome such kinds of problems as well asconstraints there are international standards are to be settled where the management has to followonly one law and theory for making and the accounting treatments. A company which operates atthe national level then it has to use those standards as well as practices which are framed by theauthority and regulatory body of the country. On the other side at the time of doing business atthe international as well as global level then it is compulsory to use and follow all kinds of theinternational accounting standards.According toHope, Thomas and Vyas, (2017)the global company when operate in aparticular industry at the international level then if it follows the accounting standards of itshome country or the host country only then each and every community not able to understandand analyse its financial performance. In this it has to make accounting treatment of variousfinancial standards by considering the international accounting practices which lead tounderstand every country's community at where it operates. There are various accountingstandards are settled and framed for the international and global firms by the InternationalAccounting Standards Board (IASB) which has to implement at the workplace. Those standards1
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