Reference no: EM133677494 , Length: 1000 Words

RESEARCH PAPER SCENARIO

The year is 2035 and the accounting profession is facing significant technological advancements, including the adoption of AI and FinTech. Accountants are transitioning from traditional data entry and compliance tasks to strategic advisor roles, using AI-generated insights to provide financial guidance and strategy optimization for their clients. The global accounting profession has attempted to establish a single global regulatory body, but with mixed results. At present, a global regulatory body distinct from the International Financial Reporting Standards (IFRS) Foundation or the Financial Accounting Standards Board (FASB) is being considered by a committee representing the global accounting profession, environmental bodies, economic groups, political leaders, and international bodies across the globe.

The growing recognition among nations that the global economy would benefit from a unified and transparent accounting framework has resulted in this unprecedented global collaboration. However, economic instability, multiple pandemics, and ongoing wars have made it difficult for international organisations like the United Nations, International Monetary Fund (IMF), and the World Bank to foster international collaboration, particularly where international partnerships and funding mechanisms are needed to assist developing nations in adopting these technologies.

Concerns have been raised that the leadership of this transformation may be heavily influenced by the world's major economies, such as the United States, the European Union, China, and others. Their preferences could significantly impact the choice of standards. One major concern is that if the United States and the European Union cooperate, it could lead to a convergence of US Generally Accepted Accounting Principles (US GAAP) and IFRS. To find a common ground and ensure buy-in from a wide range of nations, a hybrid accounting standard would need to be developed, incorporating elements from both US GAAP and IFRS, as well as other internationally recognized accounting principles.

The FASB is pushing to align International Financial Reporting Standards (IFRS) with US standards to comply with the Sarbanes-Oxley and Dodd-Frank Acts whilst IFRS is insisting that the sustainability standards, IFRS S1 and IFRS S2 are incorporated. In addition, with the implementation of AI technologies, there has been much debate around the development of ethical frameworks to ensure unbiased, transparent, and fair real-time financial data. This has resulted in the push for the development of a universal accounting language driven by natural language processing and machine learning algorithms, which is AI translatable and standardised globally.

The complex geopolitical process of negotiations still has a long way to go before there is any hope of establishing the international treaties and agreements required for nations to commit to adopting and implementing the new standards. This will be extremely sensitive as nations are required to harmonise their existing accounting regulations and practices, addressing national interests, economic priorities, and cultural differences.

Addressing sustainability, social, and environmental concerns is essential for creating a more holistic and responsible global financial system. There is an ongoing debate around how to incorporate non-financial reporting-such as environmental, social, and governance (ESG) aspects-into the new global accounting standards. One of the key areas for inclusion are, the sustainability standards derived from the ISO-IFRS agreement, and a focus on stakeholder engagement, calling for organisations be accountable to a range of stakeholders.

Research Areas

1. The globalisation of accounting regulation

Using a variety of theoretical perspectives, critically evaluate the potential global impacts of the scenario and provide detailed analysis and recommendations for the AASB to consider. Your analysis must include at a minimum:
Details of the potential impacts on Australian companies and businesses and therefore the accounting profession.
Consideration of the strategic factors of international collaboration and globalisation
Discussion of the impact of the complexity of the negotiations, customisation, and retraining

Referencing Requirements
- Use at least 4 references comprising of the following:
o 2 academic journal articles
o 2 professional journal articles
- All material that is not your own that is either in direct quotes or paraphrased must be correctly referenced using the Harvard style of referencing
- List of References with only the references referred to in the body of the report should be included