A Report on Contemporary Issues in Accounting and Corporate Governance

This report provides an in-depth analysis of contemporary issues in accounting, highlighting their impact on the accounting profession and organizations. Key challenges discussed include corporate governance, the integration of non-financial information, and the debate between mandatory and voluntary disclosure. The report emphasizes the importance of aligning international standards with organizational structures and cultures, and recommends that accountants prioritize non-financial reporting to enhance competitiveness. The analysis also touches on carbon accounting and the need for accountants to develop frameworks for measuring and reporting greenhouse gas emissions. Ultimately, the report concludes by urging accountants to proactively address these issues to ensure the quality and efficiency of accounting practices within their organizations; solved assignments and past papers are available on Desklib.

Contemporary Issues in Accounting
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Table of Contents
Executive Summary...................................................................................................................3
Introduction................................................................................................................................3
Contemporary issues in accounting...........................................................................................4
Recommendations/Conclusion...................................................................................................7
References..................................................................................................................................8
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Executive Summary
The following report has discussed in detail about the contemporary issues in accounting and
its impact on the accounting profession as well as organizations. These issues pose serious
challenges as well as opportunities in front of the accounting professionals. There exist many
different accounting issues like corporate governance, measuring the non- financial
information as well as mandatory or voluntary disclosure of financial accounting and reports.
In the end of the report, concluding remarks has been made which includes few
recommendations related to the issues that can be adopted by accounting professionals.
Introduction
Accounting plays a very important role in the success of an organization. As a result many
researchers have been conducted in order to study the importance of accounting in
organizations. With the advent of modern dynamics in accounting many new issues has
attracted the attention of these researchers in order to evaluate the issues and find the best
possible solutions to deal with these issues in a strategic manner. These issues impose
challenge on the accountant’s profession and as a result it has received huge attention in the
accountancy field (Byrne, 2018). Coke Amatil was established in the year 1904 (Coca-Cola
Amatil, 2018). The company gives a lot of importance to its customers and other stakeholders
of the organization. The organization releases its financial reports in the annual reports of the
organization on a yearly basis. These financial reports are used by its stakeholders to take
decisions especially by the investors of the company. Hence, it becomes very important to
present the organization in the best possible manner that reflects that the company is abiding
all the standards and is complying with all the regulatory norms. In order to ensure that
financial reports are true to its sense and are free from any misstatements Coke Amatil has
opted for independent auditing within the firm. Many changes have been taken place in the
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contemporary accounting world and hence, new challenges are being faced by the auditors of
Coke Amatil (Coca-Cola Amatil, 2017). The following report has majorly focused on the
contemporary issues taking place in accounting and how it impacts the accountants as well as
Coke Amatil.
Contemporary issue in accounting - Corporate Governance
With the increasing knowledge and curiosity of the stakeholders of the business many new
changes and challenges has taken place in the field of accountancy. One of the most
important critical issues being faced by accountancy is related to corporate governance. All
the other accounting issues like adopting or complying with the regulatory norms, deciding
over mandatory or voluntary disclosure of the financial information are directly or indirectly
related to this issue. Many regulatory norms and framework has been developed that forces
the accountants as well as organizations to adopt these frameworks and regulations
(Hutchinson, 2009). The direct impact of this is seen on the accounting pattern and system
adopted by the Coke Amatil. The main challenge that is faced by the accountants of Coke
Amatil is to develop a blend of the external regulations and the organizational culture.
Organizational culture plays a very important role in the accountancy field. The employees of
the company and different departments and their heads form an integral part of the
organizational culture. Hence, their involvement in the compliance with the regulations
becomes very difficult in the starting phase and if any changes occur in the regulatory norms.
In order to develop the financial reports of the company the accountants of Coke Amatil need
to closely coordinate with the human resources of the company and hence, it becomes very
important to make them work according the accounting standards and compliances. This is
important because it has a direct impact on the preparation of financial statements and
reports. Hence, a change or the adoption of an accounting regulatory norm has a chained
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impact on different departments of the company. Hence, it becomes very important for the
accountants of Coke Amatil to take into consideration all these factors so that its negative
impact does not fall on the financial performance of the Coke Amatil. Accounting is a very
important function and as a result it is very important to consider the environmental factors of
while undertaking the accounting activities of the organization. Many times it is difficult to
adopt the international regulations as it may not match with the current accounting practices
of the company. Hence, it imposes serious challenges in front of the accountants. Though, it
is believed that it offers many opportunities as well like it offers flexibility in the decision
making process of the different stakeholders group of the company. This provides
competitive edge to the company. It has been believed that with the help of this the quality of
the accounting information disclosed is improved also efficiency is experienced in the
accounting activities of the business (Dozier, 2015).
Another major contemporary issue that is being faced in accountancy is related to the
disclosure of non-financial information along with financial information which is again
linked with corporate governance. With the advent of CSR activities the need to reflect the
non-financial information in the reports of the company has increased and hence, it has
increased the roles and responsibilities of the accountants towards the organization creating
an issue in front of them. This is so because; apart from financial standards the accountants
now need to work with the non-financial standards and regulations. Because of the increasing
concern of the stakeholders towards the society and environment it has become a moral
obligation along with professional obligation of the organizations to disclose their efforts
taken towards the betterment of the society and to protect the environment (Vukić et al.,
2017).Hence, this has increased the work pressure of the accountants to measure this non-
financial information and reflect them along with the financial reports of the company.
Another issue related to this is that it requires compliance with the national as well as
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international norms and regulations which imposes a challenge in front of the accountants.
This is so because the organizational culture differs from organization to organization hence,
it becomes a challenge to comply with the international norms if the company is not in that
position. And if the company fails to comply with these norms then it may negatively impact
the competitiveness of the company (Černe et al., 2017).Also the changes in international
regulations facilitate the adoption of these changes in the organizational culture. Hence, this
further aggravates the situation. Carbon accounting is one of the major accounting issues
being faced by the accountants in today’s world. Carbon accounting involves the
measurement as well as reporting of the greenhouse gas emissions by the company in a
specific period. In order to deal with this issue carbon accounting framework and
methodologies needs to be developed by the accountants. It is argued by some experts that
this deflects the attention of the accountants from their main activity (Tang, 2018). Though, it
is believed that because of the disclosure of non-financial information the quality and
performance of the organization is positively impacted. This is the main reason that the
accountants give important emphasis to the disclosure of the non-financial information in
their annual reports.
Disclosure of the financial information is also an important issue in accountancy. This issue
is related to the corporate governance of the company and its impact on accountancy. This is
so because it has been seen that many managers use their discretionary power to voluntarily
disclose the financial information in the annual reports (International Federation of
Accountants, 2011).This has created a huge issue in the accounting world. This is so because
the stakeholders of the organization like the employees, shareholders, investors as well as
customers largely rely on the financial information of the company to take their decisions.
Hence, because of the adoption of voluntary disclosure an asymmetry is observed between
the owners, the accountants and the managers of the organization (Gunawan & Lina,
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2015).The decision regarding the mandatory or voluntary disclosure of the financial
information should be taken on the basis of the organizational culture as well as on the basis
of the demands of the stakeholders of the company. The disclosure of the financial
information has a direct impact on the market value of the share price. The method of
disclosure adopted by the organization reflects the leadership of the company and its
coordination with the accounting department of the company (Adina & Ion, 2018).
Recommendations/Conclusion
In the end, it can be concluded that with the advent of advancements in the modern
accounting standards and conceptual frameworks, many new issues has arisen in front of the
accountants and organizations. The main challenge is related to its compliance and the need
for changes in the organizational structure and culture because of the same. In order to deal
with these issues, the accountants should take efforts to merge the international standards
with the organizational structure. The decision that disclosure should be mandatory or
voluntary should be based on exploring both the ways and analysing the response of different
stakeholders of the organization. The non- financial information will help the organization to
increase their competitiveness and hence, it is recommended to the accountants that they
should comply with the required norms in order to disclose the non- financial information.
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References
Adina, P. & Ion, P., 2018. Aspects regarding corporate mandatory and voluntary disclosure.
[Online] https://core.ac.uk/download/pdf/6257655.pdf Available at:
https://core.ac.uk/download/pdf/6257655.pdf.
Byrne, D., 2018. Contemporary Issues in Accounting. Springer.
Černe, K., Hasić, T. & Galant, A., 2017. Implications of “Directive on Disclosure of Non-
Financial and Diversity Information” on Croatian Companies’ Reporting System. Venice,
2017. Management International Conference.
Coca-Cola Amatil, 2017. Annual Report 2017. [Online] Available at:
https://www.ccamatil.com/-/media/Cca/Corporate/Files/Annual-Reports/2018/Annual-
Report-2017.ashx [Accessed 01 September 2018].
Coca-Cola Amatil, 2018. Our History. [Online] Available at:
https://www.ccamatil.com/en/our-company/our-history [Accessed 01 September 2018].
Dozier, B., 2015. Contemporary issues in Accounting and Finance. [Online] Available at:
https://barbradozier.wordpress.com/2015/06/01/contemporary-issues-in-accounting-and-
finance-2/ [Accessed 2018].
Gunawan, H. & Lina, E.O., 2015. Mandatory and Voluntary Disclosure of Annual Report on
Investor Reaction. International Journal of Economics and Financial Issues, pp.311-314.
Hutchinson, M., 2009. Governance issues in accounting. Accounting Research Journal,
22(2), pp.89-92.
International Federation of Accountants, 2011. The evolving nature of financial reporting:
disclosure and its audit implications. International Auditing and Assurance Standards Board.
Tang, Q., 2018. The Role of Carbon Accounting in Corporate Carbon Management Systems:
a Holistic Approach. Western Sydney University.
Vukić, N.M., Vuković, R. & Calace, D., 2017. Non-financial reporting as a new trend in
sustainability accounting. Journal of Accounting and Management, 7(2), pp.13-26.
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