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Future Challenges Facing Accounting Essay

¶ … transparency seems to be a huge concern for the accounting profession and that many specialists (e.g. professionals and organizations in the accountancy profession such as Tilley (2010)) see transparency as remaining the next huge issue in the next decade, particularly as businesses outsource, become more complex, and powerful. Regulations that are in order include the Sarbanes-Oxley Act (2002) that came into effect due to major accounting and corporate scandals that occurred in the last century such as from WorldCom, Tyco, Peregrine Systems; Adelphia, and Enron, each of which effected share prices of numerous impacted companies and caused the public's trust in security markets to falter (Greer. & Tonge, 2006).

Importance of the SOX consists in the fact that it has restored public security in American capital markets and corporate financial statements as well as making corporate accounting more accountable for its actions and strengthening its responsibility. The SOX has led to alteration in the history of accounting by placing certain checks into the structure of the accounting system thereby changing it from its original structure....

It has done this by mandating accurate financial disclosure that is certified as such by the signing officers (Section 302), as well as requiring various other conditions, violation of which results in penalization (Section 1107).
A result has been a more reliable form of financial reporting. It was not only the SOX that were introduced as a result. Scandals such as that generated by Enron caused many parts of the world to expect a more reliable form of financial reporting. To that end, government divisions set up creating and implementing policies and values that would ensure a more honest form of accounting. In Europe, for instance, the response was three-fold: (a.) there was a call of greater infusion of ethics in corporate cultures; (b) there was an appointment of a 'Chief Ethics Officer' and (c) there was push for adoption of stricter ethical codes of conduct (Fombrun & Foss, 2004).

Nonetheless it seems to me that there is a whole aspect of business that has gone unnoticed and that slips under observation and it is this that I fervently believe will prove the next greatest challenge for accountancy within the next decade. Accountancy…

Sources used in this document:
Sources

Fombrun, C. & Foss, C. 2004, 'Business ethics corporate response'. Corporate Reputation Review, 7, pp.284 -- 288

Greer, L. & Tonge, A. 2006, 'Ethical foundations: a new framework for reliable financial reporting' Business Ethics: A European Review, 15(3), pp. 259-270, Wiley Online Library [Online].

Roslender, R. & Stevenson, J. 2009 'Accounting for people: a real step forward or more a case of wishing and hoping?' Critical Perspectives on Accounting, 20 (7), pp.855-869, ScienceDirect [Online].

Tilley, C. 2010 'Beyond 2010: Accountants in the next decade.'
The Sarbanes-Oxley Act, 2002. Retrieved 2/6/2012 from: http://frwebgate.access.gpo.gov/cgibin/getdoc.cgi?dbname=107_cong_bills&docid=f:h3763enr.tst.pdf.
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