Challenges in Accounting Led

Question: What Challenges in accounting led to the Failure of ABC Learning Center? Answer: Introduction The various considerations of the literature review of the ABC learning center is seen to be important for the purpose of the discussions based on the several types of the policy blunders and mistreatment of the revenues and the earnings. It was seen that the auditors failed to interpret the earnings and the revenues of the company. Some of the important failures of the company has been identified in terms of the non adherence to the corporate governance policies. Some of the other financial discrepancy has been identified in terms of mismanagement of high debts (Coll et al. 2013) Over the years, accounting profession is identified as an important part of the society and has been recognized with several challenges. Development of the dynamic accounting practice is identified as the key consideration to excel in the profession. The main reforms of the accounting profession has been identified in terms of the various types of the reforms which has been made in the accounting profession in terms of the development of contextual, social and the behavioral outcomes. As per the present practices of the accountants, the, the professional accountants have to go through tremendous external pressure. Some of the key components in the literature review have been identified in from of recognition of corporate governance mechanisms and profession to follow codes of professional conduct. Some of the important discussions based on the literature review has been able to discuss on the main challenges in form professional code of conduct, ASX Corporate Governance principles an d the recommendations and various types of the norms which needs to be followed for the purpose of maintaining adequate Corporate Social Responsibility (CSR) (Lee, Lee and Kwon 2014). Professional Code of Conduct As per the accounting Standards, which are followed in Australia the most important emphasis, has been seen to be given in terms of the adherence of the Code of Ethics for professional Accountants. This code was introduced in 2006 and was revised in the year 2008 by the Accounting Professional and the Ethical Standards Board (APESB). The aforementioned board was seen to be constituted by the CPA, ICAA and NIA (Everingham et al. 2013). The main responsibility of this board has been mainly identified in form of the regulations, which are set on two fold rules. The first being member engagement, system target and self-regulation. The second rule aims to formulate the restoration of the reputation of the accountants, which is seen to be generally demanded by the public (Scarino 2014). The professional code of the ethics is seen to be contributing in terms of conducting a framework for the self-regulation of the accounting profession. It further requires the individual members of the acco untancy profession to act in respect of the public interest and reflect wider responsibility for the community rather than only focusing on only the employers, clients and the shareholders (Scarino 2014). The diagram for the contemporary challenges in the accounting profession has been shown below as follows: Figure 1: The contemporary challenges in the accounting profession (Source: Bahadori, Zendehboudi and Zahedi 2013) The implementation of the various types of the professional codes has been able to show the various types of the implementations based on a series of accounting Scandal in ABC Learning Centers. It has been further seen that apart from the well known bankruptcies such as in HIH Insurance, Enron and WorldCom, the accountants were found to be guilty for violating the professional code of ethics as per Australian Corporations Act (Shahiduzzaman, Layton and Alam 2015). The principle of the integrity under the section 110.1 is able to impose the various types of the obligation, which have been able to drawn from the various type of the members of the honest professional and business relationship integrity. The various types of the objectivity under the section 120.1 has been able to impose the obligation which is applicable to all the members to compromise of their business judgment and various types of the conflicts arising out of the business interest (Yunupingu and Muller 2013). The principle of the professional competence and due care has been able to highlight the various type of the issues which is stated under section 130.1 and imposition of obligations on the members. Including the members to maintain the professional knowledge and the skill required to ensure Clients or the employers are able to receive competent professional service. The fourth fundamental concept has been further discussed under section 140.1. It has been further seen tha t the various types of the obligations of the business to refrain from disclosing and the using the confidential information which is acquired as a result of the legal duty to be disclosed. The professional behavior is seen to be included under the section 150.1 and the principle imposes the actions based on the obligations on the members to comply with the various types of the laws and the regulation. These are associated to avoid the action or the omissions, which is seen to be associated to the relevant laws and regulation or avoid any omissions, which fall under the informed third party, having the relevant informed third party, and negatively affect the reputation of the profession (Bahadori and Nwaoha 2013). However based on the accounting bodies there has been several efforts made for being ethical for drawing the criticism. The public perception of these efforts are seen to be low, the ethical considerations have been questioned based on the quality standards. In case of ABC Learning Centers, it has been observed that the ethical code has been stigmatized as the typical reaction to the profession has been seen to be powerless (Lynn and Brownie 2015). Corporate Governance, Recommendations and Principles of ASX As discussed in the professional ethical code, the ASXs CG rule was developed in the early 2000s to counter blatant instances, which is also evident in case of ABC Learning Center. These particular rules are seen to be applicable in terms of ASXCG council to augment the Corporations Act 2001, which is often known as the corporations Act, 2001. These Laws are relevant on suggesting on the important aspects of the corporate Governance practice (Kidd et al. 2015). The recent changes in the corporate governance code have been able to include the eight principles as well changes with relevance to the further guidance and support to companies. The main principle has been able to show the relevant structure and the tasks, which is able to incorporate the relevant principles for ethical decision-making, integrity, disclosure rules, risk management and the shareholders rights. Some of the major changes has been further been seen in terms of the various types of the consideration which are seen to be made in the implementation of the new materials and formerly incorporated principles. The guidance to the CG practices is further seen to be dealing with the rights and responsibilities from companys point of view. The important factor taken into consideration in this aspect has been mainly seen in terms of informing the investment decisions through full and fair disclosure. This is particularly relevant in case of the ABC Learning Centers. It has been f urther seen to be critical from the CG perspective that all the companies need to disclose the relevant portrayal of the financial position. Although in the past, it has been identified that the public company has been seen to be affected by the several types of the theories, which are seen to be associated to depleting financial condition (Cheshire, Everingham and Lawrence 2014). Corporate Social Responsibility (CSR) The corporations need to react in the socially and environmentally responsible manner. They are expected to contribute to sustain the development and have the different activities scrutinized. It has been further seen that the CSR activities in Australian companies are defined under the World Business Council for sustainable development. Figure 2: Activities for CSR (Source:Behavior Analyst Certification Board 2016) From the very beginning of this decade, it has been considered that accounting profession has been seen with several corporate scandals. These scandals have been seen to be evident in form of suspicious accounting practices and CSR approaches. The collapse of company such as ABC Learning Center has a significant amount of impact in terms of maintaining ethics of accounting profession and events, which consequently generated several amendments in the corporate social responsibility reporting. The company was seen to be making profits at the cost of Australian taxpayers whose money was subsidized for the use of child care by tested tax rebates (Burns et al. 2013). A major survey was conducted by KPMG International survey for stating the guidelines under CSR reporting 2008. As per the survey close to 80% of the largest 250 companies in the world has issued that CSR report that is considered 50% more than it was in 2005. It was further observed that the reporting level was maximum from Japan with 93% of the companys regularly disclosing their activities associated to corporate social responsibility is integrated with their annual reports (Rose et al. 2013). Japan was followed by United States and United Kingdom. With particular relevance to Australia, more than 45% of the listed companies are reporting CSR activities and the reporting process has now become a norm in the entire country. Some of the main issues of non-reporting was seen with principles of global framework and supply chain (Hou, Rego and Service 2013). The developments made in the last three years associated to standards and code of CSR practices such as the Global Reporting Initi ative, a see you having a major impact in the overall corporate social responsibility reporting. This is particularly evident from the last two years where companies has started to model is the CSR activities with their supply chain management (Hall, Agarwal and Green 2013). In 2007 company such as Mattel known as was leading toy manufacturer had to recall more than 20 million toys which was contaminated with lead as a result this was seen as a breach of CSR management and the reporting extends beyond the ownership and direct control. With a similar way the financial misinterpretations and the non reporting of the same in the annual report is often considered as a breach of CSR activity by ABC Learning Centers (Webb, McKellar and Kay 2013). Some of the earliest instances of the CSR including the ethical questions and social environment have been associated to accounting profession in the mid-1980s. With the increasing power, size and multinational enterprises several concerns and society have accepted the importance of disclosure of CSR activities in the annual report (Wardle et al. 2013). Summary of Literature Review In the recent times, the accounting profession in Australia and worldwide has shown significant transformations. This has been followed by a series of social scandals, stakeholders and issues associated to financial and environmental policies. It has been further seen that in the best interests associated to the profession that accountants have the opportunity to regain the credibility of an organization. It is an further seen that the accounting profession has asked to participate a number of improvements in the associated practices, allergies and laws which are seen to be governed by the business enterprise is and have taken considerations of becoming even larger and either diversify on a global scale. The accounting profession and the financial reporting is further considered include not only the stakeholders or thus shareholders but with the consideration of disclosure is associated with CSR policies it is equally responsible for reporting impacts on society and environment to th e general public. The increasing amount of concerns with the society and stakeholders and business ethics has raised the requirement for new accounting methods by which participants and organizations can address several matters to resolve the existing issues in accounting. Since 2005, the Australian reporting entities are required to maintain the International financial reporting standards (IFRS). As the adoption of IFRS began, the Australian accounting standards (AASB) made some modifications to the existing standards, in 2007 it came up with identical standards issued by the International Accounting Standards Board (IASB) to maintain the compliance with regulatory standards. The several types of changes in the professional code of conduct has been further specified by the corporations act and ASXCG. Despite of the improving nature of the situations and the increasing financial value of the company is some of the important questions have been raised with the government regulators and the policymakers to make any significant changes to the existing system. Several policymakers have analyzed to what extent does the accounting profession wants the ethical issues to be addressed based on quality standards. The second issue which has been disclosed is related to the extent to which the CG practices are a comparable standard and the third aspect has been considered by checking the viability of scarce legislation on the Central Securities Depository CSD in countries such as Australia and alike on a global scale (Rogers, Saintilan and Copeland 2014). References BahadoriA. and NwaohaC. 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