Accounting standards are too important to be left to accountants

Some interesting questions arise out of last week's announcement by the SA Institute of Chartered Accountants (Saica) that South Africa was the first country to adopt the International Accounting Standards Board's new statements of Generally Accepted Accounting Practice for small entities (Small GAAP).

Click here to read more

Share your thoughts on whether Accounting Standards should be set by a Accounting Body in the country or there should be a separate standard setting body.

Did you like to remain updated in Accountancy?
Subscribe to Management Accountant by Email

Comments

cma gururajan said…

The answer to this question is a set of other questions?..

1. Whether health standards are too important to be left to health care professionals only?

2. Whether Statute Delivery is too important to be left to legal professionals only?

3. Whether engineering standards setting and surveillance is too important to be left to engineering professionals?

By this time you have got my answer!!!

The process of issuing Accounting Standards in every country will be inclusive ...in the sense, prior to issuing an AS comments are invited from almost all the stake holders...The process that goes through in the issuance of AS is

a. Issue of Draft AS and the authority seeks comments on the Draft AS...

b. Stake holders respond

c. The Council responsible for issuing AS discusses/debates the comments...

d. Finalised AS issued under the common seal of the relevant authority...

" Therefore yes AS is too important and is the domain of Accountants only...while other stake holders can be participative only Accountants must have the final authority.."

13 October 2007 at 16:56:00 BST

Learning Curve Theory

Learning Curve Theory is concerned with the idea that when a new job, process or activity commences for the first time it is likely that the workforce involved will not achieve maximum efficiency immediately. Repetition of the task is likely to make the people more confident and knowledgeable and will eventually result in a more efficient and rapid operation. Eventually the learning process will stop after continually repeating the job. As a consequence the time to complete a task will initially decline and then stabilise once efficient working is achieved. The cumulative average time per unit is assumed to decrease by a constant percentage every time that output doubles. Cumulative average time refers to the average time per unit for all units produced so far, from and including the first one made.

Major areas within management accounting where learning curve theory is likely to have consequences and suggest potential limitations of this theory.

Areas of consequence:
A Standard Costing …

Resistence to Change - Approaches of Kotter and Schlesinger

The Six (6) Change Approaches of Kotter and Schlesinger is a model to prevent, decrease or minimize resistance to change in organizations.
According to Kotter and Schlesinger (1979), there are four reasons that certain people are resisting change: Parochial self-interest (some people are concerned with the implication of the change for themselves ad how it may effect their own interests, rather than considering the effects for the success of the business)Misunderstanding(communication problems; inadequate information)Low tolerance to change (certain people are very keen on security and stability in their work)Different assessments of the situation (some employees may disagree on the reasons for the change and on the advantages and disadvantages of the change process) Kotter and Schlesinger set out the following six (6) change approaches to deal with this resistance to change: Education and Communication - Where there is a lack…

Throughput Accounting

Throughput accounting (TA) is an alternative to cost accounting proposed by Eliyahu M. Goldratt. It is not based on Standard Costing or Activity Based Costing (ABC). Throughput Accounting is not costing and it does not allocate costs to products and services. It can be viewed as business intelligence for profit maximization. Conceptually throughput accounting seeks to increase the velocity at which products move through an organization by eliminiating bottlenecks within the organization.

Cost (or Management) accounting is an organization's internal method used to measure efficiency. Since no one outside the organization uses such internal accounts for investment or other decisions, any methods that an organization finds helpful can be used.

Throughput accounting improves profit performance with better management decisions by using measurements that more closely reflect the effect of decisions on three critical monetary variables (throughput, inventory, and operating expense — defin…

Management Accountant Blog

Search This Blog