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Accounting Governing Bodies Abroad - Accounting Standards

April 10, 2012 | Comments: 0 | Views: 203

Being a third year accounting student, I've discussed many of the regulatory agencies from the accounting profession here in the United States. Two examples of these would be the (FASB) Financial Accounting Standards Board and the (GASB) Governmental Accounting Standards Board. They develop the general accepted accounting principals that we as students are learning here in college. For this paper, I am going discuss organizations in other countries that resemble the two I just mentioned. I chose two diverse bodies to discuss. The first one is the NACAS out of India. The National Advisory Committee on Accounting Standards is the main accounting standard setting body in India. The next one is the Accounting Standards Board out of the United Kingdom and Ireland. The ASB shares the same role as the NACAS.

General accounting principals that these organizations would be required to come up with would be such a thing as accounting controls, procedures, and guidelines. They would come up with the basic rules of training accountants. A good way to relate what an organization like the NACAS would do, is too compare their rulings to the Sarbanes Oxley Act. Sarbanes Oxley was put in place after major scandals that shook the business world in America. One thing it does is protects against collusion by auditors and companies to project higher sales revenue by "cooking the books". A ruling by NACAS is very similar to such a ruling by SOX. As an Indian news website, IndiaPR, stated, "The Ministry is examining the recommendations of NACAS for the purpose of prescribing the Accounting Standards under section 211(3C) of the Companies Act, 1956." The ruling required a company and it's accountants to disclose all, and accurate, financial statements to a company's stakeholders. This ruling was to allow the persons of interest with a company, accurate information. Not only does it require accurate information, but as that website stated, a true and fair view on the basic affairs of the company.

Aside from basic affairs of the National Advisory Committee on Accounting Standards, there is a breakdown of the acting members of the organization. Section 201A of the Constitution of the National Advisory Committee on Accounting Standards breaks down the leadership roles of members. There is a chairperson who overseas the board. Under him or her, there are another nine members, all well versed in an area of the accounting or business profession. These include a member of the Reserve Bank of India, Central Government, Institute of Chartered Accountants, Auditor General, an Accountant Professor, the chairman of the Central Board of Taxes, two members of the chamber of commerce for India, and lastly one member of the Securities and Exchange Board of India. This board of ten people is in complete charge of making up and implementing accounting principals and relaying those principals to the government of India.

In the United Kingdom and Ireland there is a very similar governing body that goes by the Accounting Standards Board. Not to be confused by a different Accounting Standards Board by the same name that is one of the few that governs Canada. It took over from the now defunct Accounting Standards Committee in the early 1990's. From the Accounting Standard Board's website, it states they are set up with up to ten board members. (But not necessary for ten) This is very similar to India's, however there is a big difference. When the board meets there are three sit-in non-members at the meeting. Also unlike in India, only two of the board members are full time, the rest being part time. Like the NACAS, the ASB can issue accounting standards on its own. This was the difference from the predecessor board.

When the Accounting Standards Board issues a new regulation it entails a very arduous and detailed process. They write up two complete documents describing the new regulation and what is included with it. The first document includes the issues and proposed solutions to the problem. The second is more of a draft of what the regulation will look like eventually. The ASB also writes up rules that are not always needed to be followed. They act as suggestions to businesses.

As you very well know, the world economy is in an economic recession, and one way to come out of this is through globalization. By getting all nations on par with the United State's accounting standards, it could bridge the gap between nations and offer a boost for the economy. We are paving a way towards a global economy and such organizations across the globe as the NACAS, and the ASB are doing their part to do so.

Source: EzineArticles
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