Contemporary Accounting Theory

Running Head: CONTEMPORARY ACCOUNTING THEORY
CONTEMPORARY ACCOUNTING THEORY
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1CONTEMPORARY ACCOUNTING THEORY
Table of Contents
Introduction................................................................................................................................2
Corporate Failure leads to Improved Accounting Regulations..................................................2
Accounting Standard Setting a Complex Political Process........................................................3
Conclusion..................................................................................................................................5
Reference....................................................................................................................................6

2CONTEMPORARY ACCOUNTING THEORY
Introduction
The contemporaries is making sense of the doubtful and suspicious practices by the
construction of narratives that is possibly framing it as corporate scandals which has lead for
attempting the regulatory change. The problem of corporate scandal is growing day-by-day
which has forced for changing the practices of accounting by adopting different standards and
regulations by the regulatory. Therefore, the aim of this paper is to do the analysis on how the
corporate failures/crisis in the every era leads to the improved accounting
regulations/standards for financial reporting in the subsequent time period. In addition,
discussion will be done on the argument that accounting standard has always been a complex
political process in the context of global (Flower, 2015).
Corporate Failure leads to Improved Accounting Regulations
The rapid changes in the business environment and financial crisis has led to increase
the corporate failure globally. Corporate failures is considered as discontinuance of the
operations of the corporate that leads to the inability for reaping to the sufficient revenue or
profit for paying the expenses of the business. Generally, it happens due to the poor
management, incompetency as well as not adhering to the available standards or regulation
(Hamilton, S., & Micklethwait, A. (2016). The corporate also fails due to failing for adapting
the changes in the environment that includes complacency, making of risk averse decisions,
economies of administration and production as well as limited opportunities for the
diversifications and innovation. Apart from that, their leniency in adopting the available
standards and regulations has also contributed to the corporate failure. Therefore, these
leniencies by the corporate have led to the requirement for adopting the improved regulations
by the regulator (Thomson, 2015).