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Comprehensive Professional Portfolio

Question: How does politics and regulation affect you as an accountant or in your future accounting role. Answer: Contextual appreciation and awareness of assumptions Politics and regulation affect largely as an accounting and accounting role at the same time (Shim, Siegel and Shim 2012). Theoretical positions This particular section explains theories of regulation and application as accounting standard-setting process by an accountant. The main goal is to set extend theories based upon empirical work for the same (Williams 2012). As far as economic theories of regulation, it envisages regulators in case of making direct political appointments for decision-making process. It affects allocation of wealth of producers as well as associated customers. Accounting is the collecting as well as analyzing and communicating economic information. It requires developing broader understanding of accounting as well as central role in society from social perspective (Shim, Siegel and Shim 2012). Conceptual framework covers main points like: The main objectives of financial statements as well as reporting It establishes and analyzing qualitative characteristics of financial information It defines elements in financial statements It recognizes as well as measurement of elements Conceptual Framework is an expensive process for setting right direction for some kind of knowledge base as well as reduced loopholes (Whittington and Delaney 2011). Users Role Strategy Analysis Portfolio Manager Versus Analysts Generalist Versus Specialist Domestic Versus Multinational Growth Versus Value Long Versus Short Buy Versus Hold Versus Trading Macro Versus Fundamental Equity Versus Debt Cost Versus Fair Value Roll forward Versus Narrative Quarters Versus Years More Versus Less Aggregation Auditors Role Strategy Analysis Principles Versus Rule-based Materiality Versus Expedient Preparers Role Strategy Analysis Public Versus Private Complex Versus Simple Large Versus Small Domestic Versus Multinational Financial Versus Non-Financial Challenges Accountants face various challenges in tackling the political and regulatory environmental factors for future analysis purpose. With the advancement of new technologies, rules as well as regulation are changing at fast pace (Weygandt, Kimmel and Kieso 2013). Cost of administration rises, as there are more accountants for taking major challenges facing industry in recent world. It requires proper implications of future accounting activities as far as possible. Unqualified accountants- It is easy in creating own website as well as starting new business from home. An increased unqualified accountant poses serious threat in the accounting sector. Online technologies- New online technologies as well as mobile internet culture involves in cloud-based accounting software. It is one of the well-established services of HMRC Online. Business owners solicit the services of an accountant as well as carry many functions (Weygandt, Kimmel and Kieso 2012). Qualified accountants mainly offer expertise on tax planning as well as business advice in along with variety of skills at the same time. It is necessary in educating small as well as medium sized company as checking pitfalls of self-administered online accounting software. It anticipates as well as facilitates requirements in accessing accounting information (Whittington and Delaney 2011). Risks Risks in accounting as well as audit firms in describing audit risk model. This particular model describes responsibilities of management by an auditor in combining determination of risk. It proclaims financial statements as per material misstatement for future analysis purpose. It understands components audit risk model by an auditor in testing performance of business organization (Shim, Siegel and Shim 2012). Inherent Risk- Inherent risk is the risk that is considered in case of internal controls as well as material misstatement at the same time. Control Risk- Control risk is the risk that is misstated as accounting records of the company. It arises due to fraud as well as error. This risk prevents and detects in timely manner in way of internal control system at the end of accounting period. It is the combination of control risk as well as inherent risk as per material misstatement risk 9 (Scott 2012). Detection Risk- Detection risk is considers as a risk for audit procedures as conducted by an auditor. It is the portion of risk acting as a responsibility by an auditor (Whittington and Delaney 2011). Issues Needs improvement in the financial reporting system for accountants Requires in keeping the standard current in case of business as well as economic environment Proper attention on checking on the deficiency of standards Needs improvement on common understanding of financial statements Conducting independent standard-setting process like due process, outreach of stakeholders as well as assessing feedback in an overall manner (Deegan and Unerman 2011). Ensuring new standard as well as improvement in US GAAP like better reflect economics, reduced complexity as well as assessing costs and benefits at the same time Examples Regulators of electric utilities mainly set prices that consumers need to pay for electricity. FASB and other accounting standard-setters aim at conducting as independent standard-setters by political process (Scott 2011). In case of tough economy, availability of financing increases inherent factors like involvement of factors in and outside company control. It includes competency of company accounting issues but at the same time, accounting staff does not possess required expertise as well as expertise as per material misstatement (Madura 2012). Accountants requires in lowering detection risk by increased audit procedures for future analysis purpose. It includes increased extent of testing in the near future. It requires lowering detection risk by tolerating misstatement (Deegan and Unerman 2011). Reference Deegan, C. and Unerman, J. (2011).Financial accounting theory. Maidenhead, Berkshire: McGraw Hill Education. Madura, J. (2012).International financial management. Mason, OH: South-Western, Cengage Learning. Scott, W. (2011).Financial accounting theory. Toronto, Ont.: Pearson Canada. Shim, J., Siegel, J. and Shim, J. (2012).Financial accounting. New York: McGraw-Hill. Whittington, O. and Delaney, P. (2011).Wiley CPA Exam Review 2012, Financial Accounting and Reporting. Hoboken: Wiley.