Contemporary Issues in Accounting for Sony Corporation

The present study is conducted on the basis of analysing the current contemporary issues and challenges faced by Sony in terms of accounting. The study covers all such aspects that impact the sustainable accounting of the company; there are various issues such as accounting relevancy, measurement of accounting and quality, disclosures, fraud, corporate governance, organizational culture and so on.

Contemporary issues in accounting

Executive summary
The present study is conducted on the basis of analysing the current contemporary issues and
challenges faced by Sony in terms of accounting. The study covers all such aspects that impact
the sustainable accounting of the company; there are various issues such as accounting
relevancy, measurement of accounting and quality, disclosures, fraud, corporate governance,
organizational culture and so on. The study shows that these issues highly impact the overall
functionality of accounting of a firm, and for this reason firms are required to follow reasonable
and credible accounting practices.

TABLE OF CONTENTS
Executive summary.........................................................................................................................2
Introduction......................................................................................................................................4
Analysis...........................................................................................................................................4
Recommendation and conclusions..................................................................................................7
References........................................................................................................................................9

Introduction
The present study is based on the critical analysis and evaluation of the current contemporary
issues in accounting faced by the company, i.e. Sony; the study includes the proper discussion of
the challenges and issues supported by actual facts and findings. On the basis of the analysis, the
study will draw viable recommendations and conclusion so that the company can carry out
reliable and sustainable accounting and financial practices.
Sony Corporation is an internal conglomerate company based in Japan; its headquarters are
located in Kōnan, Minato, Tokyo. The company has diversified business practices that are
inclusive of customer and professional electronics, financial services, gaming and entertainment
(Sony, 2019).
Analysis
Continuous changes in the taxation system, recruiting and retaining employees, and
interpretation the effects of technology on the corporate accounting practices are all issues and
challenges for the contemporary accounting firm (Schaltegger and Burritt, 2017). The accounting
aspects state the issues that are being taken into account in the professional accounting practices
like fair value accounting, measurement approaches, a conceptual framework for financial
reporting, sustainability, financial indicators, earning management, corporate governance and
environment based accounting. Similarly, Sony makes use of advanced and new technology,
however, has remained a large issue that if or if not it can use them appropriately.
It can be noticed that the company has not indulge the innovation perspectives in its products in
appropriate manner and due to same innovation is the severe issue for Sony, there is another

obvious issue; the brand ( 2015). From the past performance it can be assessed that Sony has not
considered technical perspective in appropriate manner and due to same no profits are earned
since year Further, Sony is imposed on financial as well as reputational risks, all because of
quality of product and issue in liabilities. Products of Sony like software and electronic devices
inclusive of semiconductors are turning out to be increasingly complicated. Further, it is difficult
as the increasing advanced technologies emerge and higher demand is experienced in digital
equipment and industry. Moreover, higher risks and challenges are posed by product quality and
liability issues.
Furthermore, one more issue is the financial reports that are generated might have completed as
per the different standards of accounting; US GAAP is used by Sony for its accounting practices.
The US GAAP has formed according to the thriving business industry, in this way other
countries have established their individual accounting standards, in contrary from US GAAP. As
a result, this has led to misinterpretation between investors and financial statement users.
Moreover, the current contemporary accounting emphasize the complexities that take place
when making a comparison with financial statements same sized business in the same sectors
against companies emerging from various countries, implementing different accounting
standards (Buchheit and et,al, 2015). Along with this, the international instability in financial
reporting and the understanding of the same can make comparing global firms sophisticated
because of the shortage of stable practices of accounting standards.
Sony makes use of diversified pricing strategies and works in distinct geographic to reduce the
risks of being based on some particular markets or sales streams. This shows a better move, on
the other hand as they are working in various markets, then the problem will arise in terms of
being not able to gain a powerful and long-term market share (Kim, 2012). This is primarily

because of the companies exceeding them in context with regular innovation of products, being
the core of the technology sector. Issues held with the company are weak direction and poor
overall management which has resulted in the acceptance of the company that they are facing
struggles in keeping up with the innovation and responding to dominate competitions. The
efforts of Sony to mitigate the increasing technological advancements and higher demand, and
the governance of product quality, might have failed, if they are, then the corporation might incur
expenditures in relation with product recalls, lawsuits, reputation, brand position and after sales
services being a manufacturer of superior products might suffer. In addition, the company is also
imposed on environmental and workplace health and safety regulation that could enlarge the
operational costs or restrict the activities. Sony has realized the environmental changes issues
that can probably result in an increment in further costs because of reformed regulation inclusive
of government policies in regards to energy effectiveness meant for electronics products. In the
division of electronics, the new market entrants have threatened the position of Sony due to the
sector shift from analogue to digitalized technology.
Deductions of the pension asset value because of the decreased return from investments or
increased PBO to a lower rate of discount might be challenging to the unfunded pension
obligations, leading to a raise in pension’s expenditures. The company has recognized an
unfunded pension obligation that is equivalent to its planned benefit obligation less the fair value
of projected asset and the accrued pension and division costs. As cost of pension is available in a
gradual and set manner above the employees left service period as needed by the Employers’
Accounting for Pensions (Hoque, 2018).
Preparing the consolidated financial statements in accordance with the US GAAP needs
managerial authorities and accounting regulators to make assumptions that impact the recorded

amount of assets as well as liabilities, with the proper disclosing of contingent A&L at the rate of
report amount of sales and expenditures and financial statements at the time of reporting period
(Spiceland, Spiceland and Schaeffer III, 2015). Constantly, Sony considers evaluations of its
assumptions which are made on the basis of past experiences on different other estimates are
supposed to be reliable as per the given conditions. The outcomes of this evaluation set the base
of making decisions and judgements regarding carrying forward the values of assets and
liabilities and the documented amount of expenditure that is not apparently accessible from other
sources (Thompson, 2018). Real outcomes might vary from these assumptions under different
estimates. The current contemporary issues in accounting are inclusive of accounting
irrelevancy, changes in accounting practices worldwide, auditing requirements, and requirement
of advances skills, training, innovation, competence workforce and technology. These all come
up with threats, challenges and issues for a large-scale firm like Sony having diversified business
in different markets.
The ever-evolving digital and advanced technology, constant globalization of financial reporting
and accounting standards for disclosures and new forms of regulations also come as the main
challenge for the accounting profession (Atkins and et al., 2015).
Recommendation and conclusions
On the basis of above analysis, it can be recommended that Sony must work on its product
quality and solve its liability issues, with constantly making use of advanced technologies,
indulging innovation in product design and conducting market research to meet the expectations
of the digital and technological industry. In addition, the company must reflect its accounting
practices fairly and viable, so that fraud can be prevented and better accounting control system
can be facilitated. It is essential that the company maintains effective corporate governance for

time to time management of financial reporting and ensuring credible and reasonable
documentation. The challenges of the modern accounting process, its documentation and report
have considered as a severe concern in the inconsistency of reputation and financial handling of
the firm (O'Dwyer and Unerman, 2016). Big accounting firms like Sony are suggested to carry
out research on big data, new forms of fraud, technological changes and corporate responsibility
and sustainable practices in order to tackle the continuous and the upcoming opportunities as
well as challenges facing the accounting profession.
It can be stated that accounting has a great role in numerous ways to solve financial problems
such as Sony Corporation must conduct better investment analysis, providing quality products,
fund-raising and prestige reputation. In addition, the company must maintain optimal
environment and culture that improvises overall effectiveness, quality and accounting practices;
this can be done through ensuring smooth functioning of internal and external operations and
enhancing knowledge and awareness of managerial authorities (Epstein, 2018). The company is
also required to prove effectiveness in accounting measurements and quality, as it is highly
crucial to enhance the functionality of accounting. Furthermore, the company is required to
comply with all auditing requirements, provisions, laws, norms and accounting regulatory, while
making disclosure of financial statements and annual reports so that any irrelevancy can be
eliminated. For strengthening the asset and risk management is aligned with the flourishing asset
value, the company must improve disclosures of business details while providing customer
incorporated financial services modified with individual expectations.
The conclusion can be drawn that modern accounting practices indeed come up with various
challenges and issues, for this Sony has to keep up with all requirements to flourish in the
technological industry. It must follow all rules and regulation that make a company good at

showcasing true financial statements and reporting. Thus, it can be concluded that Sony has to
satisfy the modern accounting practices and resolve all issues by better efforts and use of
accounting tools and techniques. The company must sort all the accounting issues by following
the given recommendations, and support accounting skills and competencies.

References
Books and Journals
Atkins, J., Atkins, B.C., Thomson, I. and Maroun, W., 2015. “Good” news from nowhere:
imagining utopian sustainable accounting. Accounting, Auditing & Accountability
Journal, 28(5), pp.651-670.
Buchheit, S., Dalton, D.W., Harp, N.L. and Hollingsworth, C.W., 2015. A contemporary analysis
of accounting professionals' work-life balance. Accounting Horizons, 30(1), pp.41-62.
Epstein, M.J., 2018. Making sustainability work: Best practices in managing and measuring
corporate social, environmental and economic impacts. Routledge, London.
Hoque, Z., 2018. Methodological issues in accounting research. Spiramus Press Ltd, London.
O'Dwyer, B. and Unerman, J., 2016. Fostering rigour in accounting for social
sustainability. Accounting, Organizations and Society, 49, pp.32-40.
Schaltegger, S. and Burritt, R., 2017. Contemporary environmental accounting: issues, concepts
and practice. Routledge, London and New York.
Spiceland, C.P., Spiceland, J.D. and Schaeffer III, S.J., 2015. Using a course redesign to address
retention and performance issues in introductory accounting. Journal of Accounting
Education, 33(1), pp.50-68.
Thompson, D., 2018. Contemporary Challenges in Audit. In Contemporary Issues in
Accounting (pp. 125-143). Palgrave Macmillan, Cham.
Online

Kim, B., 2012. This Is The Biggest Problem With Sony's Brand (Online). Available through <
https://www.businessinsider.com/this-is-the-biggest-problem-with-sonys-brand-2012-4?IR=T>.
[Accessed 28 January 2019].
A., 2015. Sony faces struggle to find growth path (Online). Available through <
https://www.japantimes.co.jp/news/2015/02/20/business/corporate-business/sony-faces-struggle-
find-growth-path/#.XE6wNdIza00>.[Accessed 28 January 2019].
Sony, 2019. (Online). Available through <https://www.sony.net/ >. [Accessed 28 January 2019].