Accounting Scandal Essays

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I should be guilty of dissembling if I were not to refer to the economic difficulties which have affected Japan recently along with several other countries. I assume that these difficulties have come as a shock to people in Japan because of their contrast with the prolonged period of economic success which preceded them. But they show, as history has shown so often, that the enjoyment of steady uninterrupted growth, over the very long term, is beyond the capacity of nations. Every country, no matter how successful, seems bound to experience setbacks. The history of the changing wealth of nations is the subject for a different speech by a different speaker. But accounting has a part to play, an important part, because of its role in making …show more content…
Share prices will be lower than they could be, the cost of capital will be higher; and this is just as surely an economic disadvantage as having to pay higher wages to the workforce. Some worthwhile investment will not take place: economic growth may be significantly depressed.

This role of accounting in contributing to economic growth and prosperity is widely regarded as vital, among governments in the developed world and the developing world alike. The views of agencies which provide investment finance for developing countries and countries in transition to market economies are of particular interest. They believe that the development of effective capital markets, partly through good accounting, is a most important way of promoting growth in the poorer countries of the world. The richest countries have equal need to maintain and improve their accounting. They are not immune to accounting failure and, as business becomes more complex and exposed to a new kind of risks, accounting faces new challenges.

The Need for International Accounting Standards

A British case of the 1960s, in which the results of a business for a particular year were portrayed as a profit by one party and a loss by another party, without breaching such accounting rules as then existed, is often cited as the key trigger for starting the process of setting accounting standards in the UK. In recent years, cases of this kind have been observed at the international level. Daimler
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