What is Accounting Reform

First of all, Happy Independence Day to All,

Now, we talk about accounting reform. Accounting reform means improvement in accounting rules and regulations. We can compare it with  pre-independence India and post-independence India. 64 years ago, we were independent. With power and intelligence of honest Indian scientists, accountants, teachers, workers and others, India has become most powerful economy of world. But still, there is big need of India's reform. In this reform, we have to regulate corrupt leaders and ministers by super and effective law. Like this, there are lots of universal rules and regulations of accounting which can be improved. There is still need to reform all these rules and regulations of accounting because today business has become more advance and technical  than past business.

Following are main accounting reforms which an accountant and other accounting expert may bring.

1. Why is Govt. Paying Operating Expenses with Long term Debt 

If you read the audit reports of Govt. accounts, you will find that govt. is paying operating expenses with long term debt. There is no effective use of working capital in Govt. accounts. With this, they are not making transparent budget. So, there is big need to reform Govt. Accounting rules.

2. Ignorance of Natural Capital 

Our whole accounting sees only economic point for showing any worth of any thing. By this, we are ignoring our natural capital. Few years ago, I saw many birds near my location but now, there is not any bird? Why? There is no answer this question in our financial statements because we did not give importance to them. What will happen of our physical buildings, plants, furniture, if there will not be the birds. We are just consuming more and more natural resources without seeing its positive and negative effect on natural capital. We all are mad to increase market value of equity share capital. One day, all animals, birds and other natural capital will  get off. At that time, even after financial security, our business will be in risk. Earthquake, tsunami and other natural disaster will happen at large scale due to loss of our natural capital. Now, question is how can accounting reform be done in this area. In the balance sheet, there should be the separate column of natural capital in which we should show our position from natural capital point of view.

For example, you have made building where were large number of trees. You cut all the trees and you made your building. You should show the amount of loss of natural capital due to this. You have to show how much loss of living place of birds, animals and oxygen. In accounting, every should be counted and planning for securing natural capital should be done.

If you ask personally from me, "What will happen when anybody cut tree from root in the front of my eyes?, I will say that it will be my heart breaking scene."

3. Why is Accounting Scandal Increasing Day by Day:

We have made all accounting rules to track every financial item. But after this, someone easily does accounting scandal. It means, we still could not track the mind of human being. In accounting reform, this will be big challenge.

4. Inflation and Market Value of Assets should not be Ignored 

Day by day, value of money and purchasing power is decreasing. At that, what is the value of our asset in the market should be updated. But still, all accounting is on cost basis. It should be improved with some advance technology. Only after this, we can take good purchase consideration on sale.

Related : Accounting For Beginners

Reference for Further Reading 


Download Financial Accounting eBook







access account accountant Accounting accounting definitions accounting ebook Accounting education accounting procedure accounting process outsourcing Accounting Software advance advertising africa Amalgamation amendments announcements Annuity assets audit auditing Australia B.Com. balance sheet bank Bank reconciliation banking basic accounting BBA benefits best bill black money blog bloggers book keeping bookkeeping Branch Accounting - full tutorial budget Budget variance business businessman CA calculator canada capital capital budgeting career cash cash book cash flow statement Chiense children china class coaching coins college commerce commerce students company computer computer accounting conference Contact vinod kumar Control Your Spending corporate accounting cost cost accounting cost center cost centre CPA credit credit card cs currency data Debit and credit debit cards debt debtor degree depletion depreciation Diwali Messages documents dollar domain Downloads Dubai e-accounting earning education Education Loans email employee EPF ERP euromoney examination excel excise duty expenses facebook factor of loan fans feature fifo FII fiji finacle finance Financial financial accounting fire insurance flickr flow forensic forex formula france fraud free fun function fund GAAP GDP gdr germany gold goodwill goodwill accounting google google apps Google Adsense google apps google base google buzz google calendar Google docs google finance google fusion tables google talk govt. GST guide health Hindi Hindi Language history holding company How to treat FBT in Tally 9 HRA ICAI ICAWI ICICI Bank IFRS income income statement Income Tax India indian railway Indonesia inflation inflation accounting infographics information inspiration insurance insurance accounting Intangible interest international Internet Introduction of Tally 9 inventory investment investment in Shares invoice IT Japan Job costing journal entries Journal Entries eBook Help Kalculate keyboard kindle kuwait laptop law LBT learning lease lecture ledger leducation Leverage Analysis liabilities lifo linkedin loan logical point loss loss of profit M.Com. m.phil malaysia management accounting manual accounting manufacturing account market marketing mastercard material MBA MCA media migration mobile money ms word ms. excel multi currency in tally 9 Multicurrency Accounting mutual fund national security new and sacrifice ratio new york times new zealand news NGO nonprofit-accounting North Georgia Mountains NPV NSE odbc office oman online application online accounting Online Accounting Course otcei pakistan parents Partnership pay pal pdf Personal Finance pie chart pie chart of income pnb podcast ppf presentation price privacy policy prize money prof. vinod kumar profit profit and loss account project management provision purchase puzzles quickbooks Quote quotes quotes of svtuition rating agency ratio analysis RBI readers real estate rectification of errors remote control reports reserves responsibility accounting retirement revenue Revenue reserves review risk rupees salary sale saudi arabia saving sbi scholarship school SEBI security service tax share share trading Shares shri lanka singapore sms social accounting society solution South Africa stock stock exchange structure student students study subsidiary company svtuition swiss bank tally tally 9 Tally 7.2 Tally 9 Tally.ERP 9 tanzania tax Tax Accounting TDS teacher teaching technology test testimonial testimonials thailand tips trading trading on equity transaction trend trial balance truthfulness tuition twitter UAE UGC - NET Commerce UK United Arab Emirates university usa valuation VAT Video Voucher and vouching Wealth wikipedia working capital youtube
Accounting Education: What is Accounting Reform
What is Accounting Reform
Accounting Education
Not found any lecture VIEW ALL Continue reading Reply Cancel reply Delete By Home PAGES Lectures View All RECOMMENDED FOR YOU Category ARCHIVE SEARCH ALL Lectures Not found any lecture match with your request, please help to write it and send it to our email at vinod@svtuition.org for making this website free accounting and finance encyclopedia. Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec just now 1 minute ago $$1$$ minutes ago 1 hour ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago more than 5 weeks ago Followers Follow THIS CONTENT IS PREMIUM Please share to unlock