Financial And Accounting Challenges Faced By Businesses From Emerging Research Proposal

Financial And news report Challenges Faced By Businesses From Emerging Markets In Meeting International Accounting Standards. Companies In Azerbaijan - Research Proposal ExampleCountries same South Africa, Australia, and modern(a) Zealand etc were among the first to adopt IFRS. The countries of The European Union (EU) are now required to follow IFRS. Emerging economies like China, Azerbaijan etc. adopted IFRS. China had given January 2007 as deadline for implementing IFRS. Gradually all the countries in the world pull up stakes adopt the financial report measure. USA and Canada are in any case getting prepared for the adoption (Barry and Jermakowicz, 2010, pp.1-2). galore(postnominal) businesses which are not required to adopt IFRS and are not publicly held are still implementing IFRS in their report. This is because a common regular of accounting followed all over the world impart facilitate remedy flow of capital. If an investor of UAS, for example, wants to invest in a company in China he will pauperism to examine the financial statement of the company. If the company prepares its financial statement using same methods as that is followed in the investors country it will be easier for the investor to understand the financial position of the company. Therefore using an world-wide standard like IFRS for preparing financial statements will win investors confidence (Barry and Jermakowicz, 2010, pp. 2). However adoption of IFRS is not in all hassle free. Companies going through the alteration from old methods to IFRS specified methods face many challenges. It will be seen later in this work that there are many challenges which an entity face in adopting a new standard of accounting and financial report preparation. Emerging economies like China nd Azerbaijan have also implemented IFRS partially of wholly. But companies of these countries have faced or still facing problems caused by the transition from old constitution to the new system. The gove rnment of Azerbaijan had given a deadline of January 2008 to its Public Interest Entities for implementing IFRS in their accounting. The clarified enterprises of the country required to implement National Accounting Standard, which is formulated based on the principles of IFRS, before January 2006 (Republic of Azerbaijan Accounting Law, 2004 Article 8,9,10 and 17). Therefore, to find out the challenges faced by businesses in emerging economies, studies on companies in Azerbaijan will be helpful. There are many companies in Azerbaijan which already have converted to new system, only when there are still some companies which are yet to implement the new standard. This makes the country an arouse place for this study. Preliminary Review of the Literature In the conversion process from old accounting system to the new accounting system in Azerbaijan, different parties related to accounting, auditing and reporting face some problems. A report prepared by Yev (2009) has discussed these problems in details. The cost involved in adopting IFRS or IAS or the NAS in accounting is considerable one. Companies must bear the cost of training of their accounting personnel. The introduction of the IFRS in the accounting system could result in variegate in the financial position of the company. The financial position of a company mulish by following the previous accounting system and the financial position determined by the new accounting system might differ as a result of change in procedures, roles and obligations. This will result in volatility and difficulties in decision making. The complex nature of IFRS standard could be a problem too. Another problem that accounting personnel face is the new standard demand change in thinking. The new reporting is not just about bookkeeping and reporting it involves thinking and judgments of the accountants. Companies have to do a separate accounting for tax income accounting because IFRS or IAS and tax rule follow