Could the Suitability of the Existing Accounting System be Argued

Abstract

Accounting is a process of recording and studying financial data related to company's operations. Its aims are above all to provide information about the events in company business life in an agreed language comprehensible to accounting information users and to provide information which is vital to business decisionmaking. If we consider the above mentioned aims, we can establish that it is not easy to reach them. Accounting is not an exact science, which means that approximations or planned amounts are very often used as its tool. In addition, as the future is uncertain, we cannot determine the exact value an asset is about to achieve when converted into a monetary form, neither can we define the amount which is to be required to discharge a certain liability. And so we can ask ourselves if the existing accounting solutions enable us to create suitable accounting information. Our paper deals with the problem of the existing accounting system's suitability. Four questions are investigated, namely the question of accounting solutions consistency, reality of financial statements, capability of creating accounting information which provides an optimal management of the elements of the business process and accounting solutions' objectivity.

Ownership concentration and accounting information consistency—evidence from Chinese listed companies

“…Ordia and Bhanawat (2017) found that Indian companies' consistency in EVA and EVA-related financial parameters are observed after adopting IFRS. Milost and Cepar (2018) pointed out that classical accounting considers various elements of the business process in a different way, which means it is inconsistent. Relevant empirical research has proved that international convergence of accounting standards can enhance the comparability of a country's accounting information (DeFond et al, 2011;Yip and Young, 2012;Barth et al, 2012).…”