Analysis of Contemporary Accounting Issues in Business Practices

This report examines contemporary issues in accounting, focusing on their relevance to business practices. It analyzes three articles addressing challenges faced by organizations in contemporary accounting, emphasizing the importance of ethical practices and sustainability. The report highlights agreements and disagreements among the articles, coverage disparities, and the significance of these issues for decision-makers. The first article discusses the problems arising from the lack of a proper definition of success due to the negligence of contemporary accounting factors. The second article focuses on the shift of businesses towards social responsibility and ethical investments. The third article examines the relationship between corporate governance and company performance. The report underscores the importance of contemporary accounting in ensuring accurate calculations, corporate governance, and financial reporting, while also addressing the negative consequences of neglecting these aspects. The analysis includes discussions on corporate governance, financial reporting, and the impact of ethical commitments on business performance. The report concludes by emphasizing the importance of contemporary accounting in today's dynamic business environment, covering the significance of ethical practices and codes of conduct.

Running head: CONTEMPORARY ISSUES IN ACCOUNTING
Contemporary Issues in Accounting
Name of the Student
Name of the University
Author’s note

1CONTEMPORARY ISSUES IN ACCOUNTING
Executive Summary
The report tends to revolve around the contemporary issues of accounting and their
applicability in the business practices all over the world. In this respect, three papers have
been chosen which talk about the issues that are faced by the organisations while taking into
account the contemporary accounting. In the first paper, the problems that the higher
authorities of the companies have faced regarding the contemporary issues are stated. In the
second paper, the topic is slightly deviated and the focus is on the practices that have been
adopted by the companies in maintaining sustainability and ethics into their businesses. In the
third paper, the change in the motives of the companies have been described about how they
are bringing on ethical practices and sustainability into their investments. From all the papers,
the agreements and disagreements have been pointed out along with the disparities of their
coverage. At the last section a concluding statement is provided regarding the significance of
the issue in the recent business world.

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Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Main issues or themes of the articles.........................................................................................2
Agreement of the articles...........................................................................................................4
Disagreement of the articles.......................................................................................................5
Coverage disparity.....................................................................................................................6
Significance of the contemporary accounting issue...................................................................7
Conclusion..................................................................................................................................8
References..................................................................................................................................9

3CONTEMPORARY ISSUES IN ACCOUNTING
Introduction
The primary focus of the report is centred on a single topic of discussion. The topic
chosen for the preparation of the report is contemporary issues in accounting. It is to be noted
that accounting includes two types. One of them is the internal accounting and the other one
is the external accounting which is also regarded as external financial reporting. It is
noteworthy that the companies depend on the annual reports for addressing to the general
public. However, it is evident that the companies also rely on the economy, community and
the environment for the daily operations of their businesses. These elements not only include
financial reporting but are also concerned with the corporate governance and the corporate
social responsibilities of the companies. While performing this job, the companies face
certain significant issues. Keeping this fact in focus, three articles have been chosen which
discuss about the above phenomenon. The report begins with a brief definition of the issue
which relates to the three chosen articles. Further the report moves on to providing
agreements and the disagreements of the three articles. The report further talks about the
coverage disparities that are highlighted in the three articles and in the final section the
significance of the contemporary issues are discussed. In this part the importance of the issue
to the various decision makers of the organisation are also stressed upon.
Discussion
Main issues or themes of the articles
In the first article that is chosen for the paper, the issue that is taken into consideration
is the lack of proper definition of success due to ignorance of the contemporary highlights.
The article puts emphasis on a case where the founders and the sole owners of a particular
company are finding themselves in hard situations due to negligence of the contemporary
factors of accounting (Harvard Business Review 2019). As a result they could not locate

4CONTEMPORARY ISSUES IN ACCOUNTING
growth in their business and find themselves unable to pay dividends to the employees
(Bazley, Hancock and Robinson 2014). Taking this issue in consideration, other examples
can be stated which talk about the importance of contemporary accounting (Harvard Business
Review 2019). In one of the papers, the different problems related to contemporary
accounting as faced by the accountants are emphasised upon. The similar issues which have
been talked in other books relate to the negligence of the environmental practices which
might severely affect the organisations.
The second article that is chosen for this paper discusses about the shift of the
businesses towards being socially responsible due to the growing concerns between them
regarding the negative effects of the negligence of the contemporary accounting (Wahedna
2019). The investment choices that are made by the organisations have the elements of ethics
and sustainability. This is because they have suffered the consequences of being unethical in
the industry (Wahedna 2019). There have been different raised questions regarding the
inclusion of corporate governance into the system of operations. From this article, the
different governances of social and environmental in nature can be considered as core factors
that impact the nature of investments of different companies.
The third article that has been chosen for this paper talks about the ethical
commitment of the board on the enhancement of the corporate governance within their
system of operation (Salin et al. 2019). The objective that is stated in this paper is to examine
the relationship that is present between the corporate governance and the performance of the
company. The paper also talks about the previous studies that were conducted regarding this
relationship (Salin et al. 2019). The studies have shown mixed evidences. However, it should
be noted in this regard that most of the commitments made by the companies are positive.
The negative situations that have compelled the companies to have these commitments are
also pointed out in the paper.

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Agreement of the articles
All the articles that are chosen for this paper agrees on a similar note that
contemporary issues in accounting are important for the running of the businesses. The
companies should take into account the different elements of contemporary accounting and
include in their systems (Bazley, Hancock and Robinson 2014). This would further enhance
the accuracy of the calculations.
Another key point of similarity that is pointed out in all the three articles is the
presence of the negative situations while ignoring the importance of contemporary elements
(Luft and Shields 2014). All the papers discuss about the negative issues arising due to the
negligence of the owners and the founders in interpreting the relevance of contemporary
accounting at the maximum level (Luft and Shields 2014). As a result, they faced slow
growth of their business in quantitative terms and were unable to allot dividends to the
shareholders. However, in the recent days, there is a growing concern about the importance
of the ethical and the contemporary issues in accounting and the board members are
committed towards bringing about this change.
All these above factors relate to the findings that is embedded in the studies of
different authors. The different non-environmental compliance activities that are carried out
by the organisations have caused enough damage to the environment and have also reduced
the environmental sustainability (Bennett and James 2017). It has been concluded through
various studies that the organisations had not considered sustainability and the knowledge
sharing behaviour to be important constituents of their business (Bennett and James 2017).
This trend has been modified recently due to the major hit in the profitability and the growth
of the businesses. In recent days, the companies are more focussed in bringing sustainability
to their businesses.

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The issues that primarily occur due to the underestimation of the contemporary factors
can be classified into many forms (Fairfield and Jorratt De Luis 2016). The first important
issue is related to corporate governance. The companies fail to instil corporate governance in
their systems and as the result the entire working of the accounting system gets hampered
(Fairfield and Jorratt De Luis 2016). The financial reporting faces issues in abiding by the
regulations and provide reports in a timely manner. The next issue that is important in this
context is the issue regarding the accounting and the internal control systems of the
organisations (Tricker and Tricker 2015). Not following the rules of the contemporary
accounting might lead to violations and fraud in the entire system of accounting. Due to all
the above stated matters, contemporary accounting is a very important topic to be taken into
consideration, especially in today’s business environment.
Disagreement of the articles
Though there has been many evidences regarding the agreements of the articles on a
similar note, there are still certain differences. However, the extent of differences between the
articles are less than that of their similarities.
In the first article, the negativities that have led to the slow growth of the company
and minimisation of the value of the shares, are not only attributed to contemporary
accounting. Certain other arguments have been stated regarding the articulation of the
owner’s strategy of the business (Ward 2016). In this regard, an argument has been provided
regarding the primary aim of the businesses which has been maximisation of shareholder’s
value (Visintin and Pittino 2016). According to this paper, the importance of contemporary
accounting has been kept next by the businesses.
In contrary to this, the two other papers clearly state that the companies are making
efforts in being socially and ethically responsible. In one of these papers, it is said that the

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previous notions about the decline in performances due to ethical investments have now been
replaced by the belief that investing ethically would enhance performance (Park, Lee and
Kim 2014). Hence, this has become the sole objective of the companies. The companies have
continued to invest for a cause that would be beneficial in social terms.
According to the other paper, there is a clear evidence of the commitment of the board
of the companies towards corporate governance which would further be needed to increase
the performance of the companies (Tricker and Tricker 2015). The companies practice many
ethical operations in order to improve the conditions of the corporate environment and
likewise they sustain the performance of the company.
Coverage disparity
There have been certain situations which have reflected significant coverage
disparities between the articles. In one of the articles, it is mentioned that the ethical
commitments of the boards are measured through the different codes of conduct of their
respective countries and also the through the international best practices (Isidro and Sobral
2015). These factors relate to the growth in the corporate performance which is measured
through return on equity, return on assets, net profit margin and many other financials. The
second article has focussed on the use of the same ethical practices in making rational
investment decisions. There has been a gap in stressing upon the negative issues that have
occurred in the past due to the previous limitations (Isidro and Sobral 2015). This gap is
clearly shown in the third article that talks about the issues that are faced by the higher
authorities such as slow growth and dividend obligations.
However, despite of these gaps or limitations present in the papers, they all reflect the
positivity and the ethical commitments that are made by the companies in practicing
sustainability into their businesses. This is because they have become conscious of the

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limitations that have occurred in their traditional accounting systems due negligence in
including the contemporary factors in their accounting systems.
Significance of the contemporary accounting issue
The contemporary issues of accounting are significant in today’s changing business
environment. This is because contemporary accounting provides a general guidelines of the
regulations about the ethics and code of conduct of the businesses (SA 2015). The concept
also includes certain other related topics such as agency problem, audit procedures and
environmental accounting which are very important topics of consideration by the
management. There can be issues in accounting, manipulation of figure, frauds in the
accounting system arising while neglecting these elements (SA 2015). This in-turn might
affect the growth and profitability of the firms. Hence, study of these issues are significantly
important for the proper functioning of the business.
The financial statements prepared by the companies are largely dependent on the
judgements and the competence of the different individuals who are in-charge of their
preparation and presentation (Lo 2014). Therefore, it becomes the ultimate responsibility of
the accounting professionals to maintain credibility in the eyes of the common people. This
involves expending of significant resources. In contrary to this, there has been a fundamental
assumption stated in the positive accounting theory that the individuals would take actions
according to their own interests (Lo 2014). In this phenomenon, the professional account’s
own best interests can be counted as honesty and integrity.
There is always a need for implementing a change in the system. It has been seen
from two of the chosen papers that there is increasing awareness and consciousness among
the management in developing sustainability into the business (Schaltegger and Burritt
2017). Not only in the business operations, but also in terms of investments, the companies

9CONTEMPORARY ISSUES IN ACCOUNTING
have put forward many initiatives for including ethics and sustainability into their activities.
However, significant changes are still need to be made and some of the companies still need
to rethink about the accounting practices of their businesses. It is seen that still the top
priority of the companies is to maximise the wealth of the shareholders (Alsharari, Dixon and
Youssef 2015). This notion needs to be changed in the current phenomenon and the sense of
sustainability needs to be incorporated within the environment of the businesses.
Conclusion
From the above paper, it can be concluded the contemporary accounting is a very
important part of the internal accounting process that is carried out in companies. Negligence
of the elements of the contemporary accounting might lead to detrimental consequences for
the companies. Discussing the three chosen papers, it is clear that one of the papers attempts
to explain the negative situations that arose due to negligence in following the ethics of the
internal accounting procedures. The other paper talks about the increasing consciousness
among the business entities regarding the practice of ethics and sustainability in the business.
The last section of the paper talks about the significance of these issues and the credibility of
these concept as followed by the accountants of the business entities.

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References
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critical review and a new contextual framework. Journal of Accounting & Organizational
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Bazley, M., Hancock, P. and Robinson, P., 2014. Contemporary Accounting PDF. Cengage
Learning Australia.
Bennett, M. and James, P., 2017. The Green bottom line: environmental accounting for
management: current practice and future trends. Routledge.
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Luft, J. and Shields, M.D., 2014. Subjectivity in developing and validating causal
explanations in positivist accounting research. Accounting, Organizations and Society, 39(7),
pp.550-558.

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Park, J., Lee, H. and Kim, C., 2014. Corporate social responsibilities, consumer trust and
corporate reputation: South Korean consumers' perspectives. Journal of Business
Research, 67(3), pp.295-302.
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