Business Research Methodology Report

This report examines the accounting challenges faced by Infosys Technologies Limited due to globalization and changing accounting standards. It outlines the objectives, scope, and methodology of the research, reviews relevant literature, and analyzes data collected through questionnaires. The findings highlight the transition from USA GAAP to IFRS and the benefits of adopting international standards. The report concludes with recommendations for overcoming accounting challenges in global organizations.

Business Research Methodology
[Document subtitle]
[DATE]
[Company name]
[Company address]

Running Head: Research Report
Contents
Introduction................................................................................................................................2
Project Objectives......................................................................................................................3
Project Scope..............................................................................................................................3
Review of Literature..................................................................................................................4
Research Methodology...............................................................................................................7
Data analysis & Interpretation...................................................................................................9
Conclusion................................................................................................................................14
References................................................................................................................................15
1

Running Head: Research Report
Introduction
In today’s world, globalization prompts the companies to open their doors to various new
challenges and it becomes difficult for evry organization to compete in this global world.
Various challenges come across and the most prominent is the challenge of accounting.
Organizations face intense challenges of accounting and they are expected to adopt rapid
changes which help in facing such challenges. Accounting practices have faced failures due
to the change in the global market. Various environmental factors and new accounting
standards pose problems to the organizations. Many companies faced such challenges of
accounting, one among them is Infosys Technologies Limited.
Infosys Technologies Limited established in 1981 is the fastest growing IT based industry of
India. This company is listed on the NYSE, as the leading global IT and consulting company
which provides a huge number of IT solution services to its clients. This company offers
software services, development and application services to its client globally. Infosys was the
first Indian company which was listed on NASDAQ (Infosys Technologies Limited, 2008).
This company generates huge revenues up to 10.21 billion USD and has more than 198000
employees across the globe. Earlier, Infosys used to file Form 20-F with the SEC in
accordance with the USA GAAP, but now due to globalization various changes in the
environment has forced the companies to change their practices and norms. In accordance to
globalization, the economy being a closed one was now transformed into an open economy
which imposed the global companies to change their business practices. In this research, the
various challenges of accounting, which are faced by the global organizations are being
studied. Likewise, Infosys also faced some accounting challenges and immediate solutions to
such problems were required in order to face the problems arising due to various reasons and
lead to economic development (Infosys, 2008).
2

Running Head: Research Report
Project Objectives
The general purpose of this study is to examine the challenges of accounting the global
organizations are facing. This study will help in examining the risks and challenges the
companies are facing in today’s world. In this regard, the objectives of the study will include:
-
 To determine the various challenges of accounting faced by Infosys
 To determine the cause behind such challenges
 To suggest the remedial measures to face such challenges
Project Scope
This research is concerned with the challenges of accounting, which are faced by the global
organizations. With the modern age of time, Companies face huge risks and challenges in
their businesses due to globalization. Infosys faced the accounting problems when
globalization came in the era and this study understands the factors which led to accounting
problems and their remedial measures (Vinayagamoorthy, 2014).
3

Running Head: Research Report
Review of Literature
Review of literature states all the studies that have been done taking into account the existing
accounting principles and practices and the future development of accounting principles.
Dolphy D’Souza, the author of the book “Indian Accounting Standard and GAAP” states the
Indian Accounting Standards according to the Indian GAAP. In his study, he states the
various different accounting standards which will be needed at the time of change in the
business environment. Also in his book, this provides the discussion of the various
accounting policies and their formulation in comparison to international accounting standards
(D'Souza, 2002).
Accounting Standards and Corporate Accounting Practice: T. P. Ghose, states the study of
accounting failures and various trends of financial reporting. He also discussed various
accounting policies with SEC in order to set the accurate form of implementing the
accounting rules in an organization.
Indian Accounting Standards: This book is written by Asish K. Bhattacharya. In this book all
the accounting standards (AS), accounting standard interpretations (ASI) which are issued by
Institute of Chartered Accountant of India has been stated. The book also states the various
provisions of International Financial Reporting Standards (IFRS) and U.S.GAAP. This book
helps to provide a guide on the implementation for accounting standards (Bhattacharyya,
2006).
4

Running Head: Research Report
International Financial Reporting Standards (IFRS): According to Ankarat, IFRS is the set
of standards formulated by the IASB, which are the international accounting standards which
are based on good principles and not vague. IFRS is the guideline for the organizations to
implement the various standards.
One of the author in 2010 has stated some benefits of IFRS such as, that it helps an
organization in facilitating its shares across the markets, helps in providing efficiency in
maintaining the financial statements, also adds the interest of foreign investors in the
financial statements of the companies.
Herbert E. Olivera and Charles Martin in the year 1993 stated that the accountant’s role is the
major role in preparing the financial statements of an organization. Therefore, the accountants
must be educated according to the changes taking place in the accounting standards and
practices. Management must also be knowledgeable about the accounting standards which
helps in making decisions. Financial information should not be just handed over to the
management by accountants. The management as well the accountants must put efforts in
preparing he financial statements and they must disclose their statements.
Narshimrao Government in the year 1991 specified that liberalization, privatization and
globalization in India has led to introduction of International Financial Reporting Standards
(IFRS) as close economy was turning into an open economy. The International Financial
Reporting Standards helped in making financial statements more consistent in nature and this
5

Running Head: Research Report
also led to an essential change in accounting practices as the organizations were facing
challenges due to LPG. This involved slow growth, but the mind set of the organizations
changed towards IFRS.
Andrew Higson, In his study “Corporate Financial Reporting Theory and Practice”, states the
major issues faced in financial reporting and also states the relationship of financial reporting
with external auditing. He also states the description of financial reporting and also lays
emphasis on recent developments in financial reporting and accounting practices which can
help in making economic decisions and prediction of the business of an organization (Higson,
2012).
Prof. Shahrokh M. Saudagaran is the author of the book ‘International Accounting- A Users
Prospective’ in which he discusses the challenges that are faced by the organization in
accounting standards due to globalization. According to the author, the accounting practices
are influenced by various factors pertaining in an economic environment. The accounting
practices are different in every countries which build a barrier in the minds of the investors in
doing business with the companies having different accounting practices. Another factor
stated by the author in his book is that the accounting statements must have full disclosure to
public and companies at large (Saudagaran, 2009).
Amanda Paul and Eddy Burks in the year 2009 in his article “Preparing for international
financial reporting standards” states that accounting problems are one of the biggest
challenges being faced by organizations. And also states that very soon the accounting
6

Running Head: Research Report
principles (GAAP) which are known today will not exist in the future. The new accounting
standards will come in the future known as International Financial Reporting Standards
(IFRS). This study states the history of IFRS and also the advantages and disadvantages of
using IFRS.
Research Methodology
The research methodology is devised plan used to get information on the topic chosen for the
research project in which the detail about the data and instruments used to complete the
research are stated. The sample size is an important feature of any empirical study in which
the goal is to make inferences about a population from a sample. The sample size is used to
build conclusions. The sample size of this research project is 25.
The technique of Random Sampling has been used in the analysis of this project. Random
sampling refers to the method of sample selection, which gives each sample combination an
equal probability of being picked up and each item in the population is given the chance of
getting selected in the possible probability (Moffitt, 2017).
The questionnaires were distributed through print and email to the employees of the Infosys
organization. Both primary and secondary sources of data were used for data collection for
the study. Primary data are those, which are collected for the very first time. There are so
many methods of collecting the primary data, but all are not used in this project. In this
project, primary data were collected through questionnaires. Also the secondary data has been
gathered from various researches and literature to fill in the required project. The secondary
data was collected through textbooks, Journals, Articles, Websites (Kothari, 2004).
7

Running Head: Research Report
Data analysis & Interpretation
The respective project has been analyzed and interpreted through the following instruments
and research.
Q1. Has Infosys ever faced challenges of accounting?
a) Yes
b) No
c) Cannot predict
80%
12%
8%
Yes
No
Cannot predict
Figure 1
Q2. State the challenges of accounting faced by Infosys from the given below challenges.
a) Globalization
b) Demand for skilled accountants
c) Change in information technology
8

Running Head: Research Report
d) IFRS
e) None
40%
12%8%
40%
Globalization
Changing technology
Demand of skilled
accountants
IFRS
None
Figure 2
Q3. How can the Infosys face the challenges of accounting?
a) By continuing with USA GAAP accounting standards
b) By adopting the IFRS
12%
88%
Continuing USA
GAAP
Adopting IFRS
Figure 3
9

Running Head: Research Report
Q4. Has Infosys adopted IFRS?
a) Yes
b) No
93%
7%
YES NO
Figure 4
Q5.Has the implementation of IFRS, helped Infosys face the challenges of accounting?
a) Yes
b) No
88%
12%
YES NO
10

Running Head: Research Report
Figure 5
From the above stated analysis, it can be interpreted that Infosys was facing challenges of
accounting due to various reasons like globalization, change in information technology,
demand of skilled accountants and etc. Earlier Infosys adopted the accounting standards of
USA GAAP but due to certain challenges they shifted to IFRS in order to face such
challenges.
International Financial Reporting Standards are the accounting standards which help an
organization to present its financial statements properly and also helps the stakeholders in
corporate and understand the financial information about the organization.
IFRS was needed because of the following reasons:
 Due to globalization, companies had to open the gates of trade since there was an
expansion in the business economy.
 Companies had to get listed on various stock exchanges as well.
 Globalization also led to changes in information technology which was the biggest
challenge of accounting.
 With upgradation in accounting standards, the accountants with higher education and
skills were required.
After implementing IFRS in Infosys, they got benefits such as:
 The financial statements were more comparable and understandable, which helped the
stakeholders and other companies in understanding the financial position.
 IFRS helped Infosys in building proper standards and removing the errors from the
accounting standards (Subbarao, 2011).
 The goodwill and retained earnings of Infosys also increased after adopting IFRS.
11

Running Head: Research Report
 Fair value approach in making the financial statements was adopted.
 It helped in building new global clients.
 Transparency, reliability, comparability was now shown in the financial statements of
Infosys.
 It also helped Infosys in practicing better and accurate accounting standards.
 This also led to improvement in the skills of the managers and accountants.
Some of the remedial measures to overcome challenges of accounting are mentioned below:
 ICAI and the Government must provide the companies with conferences, workshops
and programs in order to make them aware about the new accounting standards such
as International Financial Reporting Standards (IFRS).
 The professionals and accountants of the global organizations must be provided with
proper training required in the implementation of IFRS.
 Internal and external audits must be conducted on a timely basis to face the challenges
of fraud.
 Proper training courses must be provided to ensure the best quality accounting
standards which are being implemented in the organization (Half, 2017).
 Awareness of new accounting standards must be provided to the people.
12

Running Head: Research Report
Conclusion
Infosys, being the fastest growing industry also faced the challenges of accounting due to
various factors pertaining in the business environment. From the above stated research, it was
clear that by adopting IFRS the accounting problems can be faced in any global organization.
Project objectives were stated completely in the research. Infosys was benefitted in various
forms after adopting the IFRS in order to overcome the challenges as this is the only accurate
measure to overcome the accounting problems pertaining in the business environment. IFRS
led to improvement in the accounting structure as well as in the growth of Infosys. Various
other remedial measures have also been stated in the research in order to face the challenges.
13

Running Head: Research Report
References
Bhattacharyya, A., 2006. Essentials of Financial Accounting, s.l.: Tata McGraw-Hill
Education, Available at:
http://books.rediff.com/book/essentials-of-financial-accounting/9788120346512
D'Souza, D., 2002. Indian Accounting Standards and GAAP: Interpretation, Issues, and
Practical Application: Snow White Publication
Half, R., 2017. Emerging Issues Impacting Today's Accountants, Available at:
http://www.aicpa.org/InterestAreas/YoungCPANetwork/Resources/ProfessionalIssues/
Pages/Emerging_Issues.aspx
Higson, A., 2012. Corporate Financial Reporting: Theory & Practice, Available at:
http://sk.sagepub.com/books/corporate-financial-reporting
Infosys Technologies Limited, 2008. Experience of Indian Corporates in implementation of
IFRS, Available at: http://oldwebsite.iica.in/images/1stPPTGargi%20Ray.pdf
Infosys, 2008. Infosys technologies limited report, Available at:
https://www.ibef.org/download/Infosys.pdf
Kothari, C., 2004. Research methodology: Methods and techniques: New Age International
(P) Ltd., Available at: http://www.modares.ac.ir/uploads/Agr.Oth.Lib.17.pdf
Moffitt, K., 2017. Research Methodology: Approaches & Techniques, Available at:
http://study.com/academy/lesson/research-methodology-approaches-techniques-quiz.html
Saudagaran, S., 2009. International Accounting: A User Perspective: CCH, Available at:
http://www.swlearning.com/accounting/saudagaran/ppt/07.ppt
14

Running Head: Research Report
Subbarao, D., 2011. Challenges to the accounting profession – some reflections, Available at:
http://www.bis.org/review/r111222e.pdf
Vinayagamoorthy, A., 2014. IFRS and indian current scenario. International Journal Of
Scientific Research And Education, 2(5), pp. 753-760.
15