Code Of Ethics For Professional Accountants â€Myassignmenthelp.Com

Question: Discuss About The Code Of Ethics For Professional Accountants? Answer: Introducation In slater and Gordon, the capital marketing expectation was met by using a different revenue recognition strategy that they had developed overtime. The use of work in progress will influence revenue recognition principles of the company. (Easton et al., n.d.) The financial situation of the companies, at least that of a good part of those that are registered in the Stock Exchange of Australia , continues being positive and contrasts, in the majority of the cases, with the behavior that they are registering their actions in the last year. The explanation for this dilemma, agreed analysts agree, is that the market has overreacted to the current external and internal situation, and that although aspects such as devaluation of the dollar, falling service prices, weak economic growth and reform tributary are passing bill on several companies of the country, the figures of their balance sheets are still in positive territory(Gibson, 2013). Slater and Gordon share price fell so badly by 50% in late 2015 There is real stability in that market If this is the case, the exchange rate swings will continue, also helped by international uncertainty: weakness of the economy, normalization of monetary policy in the Country States, lower flows of foreign capital and outflow of resources from the country. The main indicator of the Stock Exchange (ASX) and which reflects the behavior of the 20 services with the largest market capitalization shows a drop of 19.77 percent in these nine months of 2015(Robinson et al., n.d.). Undoubtedly, not all companies devaluation, the fall in the price of a company and the slowdown of the economy hits them equally. As the analysts themselves say, there are actions and sectors more defensive and resilient than others, which allows them to be in the middle of the 'downpour' without 'getting wet' so much. Phenomena such as devaluation, which already marks 28 percent so far in 2015, impact companies via costs (debts and imports), but favor others because a large p art of their income comes from abroad (sales and profit from subsidiaries). How revenue is recognized under IAS 18, revenue and the new accounting standards There is no deadline. The issuance of Financial Reporting Standard (NIF) D-1, Income from contracts with customers, by the Australian Council of Financial Information Standards foreseen in October 2015 its adoption as of January 1, 2018 and now not only are missing a few months, but its implementation requires very important changes that must be implemented since 2017 and in some cases undoubtedly underestimated (Savage et al., 2013) The NIF D-1 represents a very relevant change in Australian accounting standards, which lacked a proper guide to revenue recognition. In the absence of the specific standard, International Accounting Standard (IAS) 18 was applied, which was somewhat vague in nature and allowed a wide variety of accounting practices, often inconsistent among entities within the same industry. Along with this diversity, factors such as improved comparability and transparency led to the replacement of IAS 18 itself and the other international income recognition standards un der IFRS 15, Revenue from ordinary activities from contracts with customers, issued in 2014 and also effective from 2018(Bhimani, 2006). The basic principle that MFRS D-1 proposes is to recognize the revenue from services and services transferred to customers in exchange for the consideration to which an entity expects to be entitled to exchange such services and services. As simple and logical as all this can sound, it does have extremely complex implications. It should begin by saying that issuing an invoice or sales ticket does not necessarily mean that an entity has the right to recognize an income in the income statement. And that is the accounting practice of many companies in Australia today. Accounting treatment for revenue recognition in work in progress accounting Simple to evaluate the work in progress is that the employer writes on each invoice (and any other expense) to which work corresponds. So, while the work is not finished, all those expenses are work in progress and when it is completed and invoice leaves to form part of the stock account. I do not know if you can think of another way to value that work in progress that can The works in progress, pending to be invoiced, are valued in the same way as they are. the invoices. And of course, it should be done by those who normally execute them and invoice them (Savage et al., 2013Therefore, it is a data that must be contributed by whoever is carrying out the execution of the works. The invoices that come to the accountant, with information by work, is something else. It is executed and invoiced. It only serves the analytical accounting of executed and billed works, work by job, and if you receive this information properly. So, what is the problem really in this case. Analytical accountabi lity in the face of billing, or valuation of inventory pending invoice for executed work a) - If it is the first, the company must inform in the invoices to which it corresponds. b) - If it is the second, an information must also be given to the accountant, for part of the company, of the work executed and pending invoicing. Work by work, that is to say, fudge by fudge. Logically, if due to the importance of it, it is worthwhile to carry out this registration. Since the subsequent adjustments would have to be carried out with respect to the invoices that were being received, since a part or all, would already be counted as inventories with the corresponding registration as income. I repeat, is it worth it to works of little relevance (usually chaps, as reported) and by a builder of Slater and Gordon. It is two different issues that are being contemplated in this case. Let it be defined who counts what it really wants to accomplish. Work by job, or customer by customer, that would be the real problem. And the measurement, therefore, corresponds to the company. And not only at the end of the year (as possibly would be this case), if not, month by month. And finally, in cases of builders or businesses, the most usual, if any, is to limit themselves to the value of the existences as services (materials other than works), collected and not executed, forgetting us of the executed work pending invoicing. Why does one want to lend this value? It requires unnecessary regular adjustment adjustments that do not take it anywhere. You can do that, which certainly is, but this operation is aimed at other types of companies where it is worthwhile. They are jobs, because I do not break down (Savage et al., 2013).I only have repairs. Where do we want to go? It is not worth even placing normal services (only materials), assuming that a customer of this type, still had them at the end of the year. Come man, it is "shabby loans" that are buying as the executions, And services as a work executed pending billing, better not talk about it . It is better that we forget the subject. if not, to point it to the constructor (borrow), to see what he thinks(M, 2016). Review OF the annual financial reports of Slater and Gordon The net profit in 2014 as shown in the consolidated statement of profit or loss and other income was $68.208 million. This is profit after tax including the work in progress in two years of revenue accounting. In 2015, the statement of consolidated statement of profit or loss increases to $ 83.804 million after tax. In 2016, there was a significant drop in revenue for Slater and Gordon and is recorded as $ 49.4 million for the year ending 2016. This is due to changes in revenue recognition principles and can be explained as; Current IFRSs leave more scope for professional judgment and to some extent can be said to be more flexible when designing and implementing revenue recognition policies and practices. IFRS 15 is much more restrictive and contains more specific rules and examples than IAS 18, IAS 11 or its Interpretations, so that the application of the new requirements may lead to significant changes in the income profile and, in in some cases, in the recognition of associated costs. In addition to the major impacts of changes in the conceptual model, it should not be ruled out that entities may be affected in more detailed matters, since they are now reflected in the standard transactions and practices that previously had no guidance nor comments (Savage et al., 2013).Among the multiple impacts expected by some companies, it will have to estimate variable balances, allocate revenues under different rules and recognize those revenues on a transfer basis of control, which could be different from the current recording time. However, impacts will go beyond operations, as different companies may face the need to implement new systems, processes and controls and even how to do business. The new standard requires processes that identify the components of each transaction, as well as controls to ensure its proper registration. Such controls may require changes in the company's systems and therefore for IMEF it is important to disseminate the new standard and emphasize that companies should evaluate their effects, new needs for controls and systems and whether these changes may or may not be implemented before to start 2018 (Savage et al., 2013). One more worrying aspect is that the accounting standard requires companies to use one of two forms of financial information transition: The first option is the full retrospective method, which requires that the effect of the accounting change be disclosed in the 2017 financial statements, while in the limited retrospective method, the effec t of the change is in the financial statements for 2018. In the first case, all such changes in the methodology of registration, identification of the components of the transaction, systems, etc., should already exist and be operational from 2017. As can be seen, the implications that this new normativity entails are diverse and therefore it is transcendental to know the detail of it. At we will continue analyzing the subject and contributing to the subject (Savage et al., 2013) IFRS 15 establishes the new revenue recognition model derived from client contracts. This standard presents all applicable requirements in an integrated manner and will replace current income recognition standards, IAS 18 Income from ordinary activities and IAS 11 contracts, as well as other IFRIC related interpretations. IFRS 15- Revenue Adoption The complexity of the application of IFRS 15 and the data required for the new breakdowns, which are very detailed, may require the creation of new systems and processes, or the modification of existing ones. The impact of IFRS 15 will not therefore be restricted to a mere accounting question and presentation of financial information. The magnitude of the changes can be large in many cases.In this scenario, it must be borne in mind that it is necessary to prepare the market and train and inform analysts about the impact of the new Standard, and that it will have to consider other impacts in a broader sense, such as changes in key indicators the company's performance and other key metrics, impact on loan covenants, impact on employee compensation plans and the likelihood of compliance, impact on the payment of taxes, etc. Long-Range Implications Recognition, measurement and disclosure of revenues will be affected by the new standard. The changes impact all companies that sign contracts with their customers to offer products or services, and apply to revenue earned from all contracts with customers, regardless of the transaction or industry. Entities will need to reevaluate their sources of income to understand the magnitude of the changes (EY,2015) Recognition principle and five-step model The new framework, which focuses on contract performance obligations and the assignment of a price to those obligations, introduces a completely new five step approach to revenue recognition: This new methodology can lead to changes at the time of recognition of income. Companies will need to use professional judgment when determining the terms of the contract, including the implicit terms of the contract. It will be necessary to disclose more information in the financial statements, the notes should include qualitative and quantitative in formation on the company's contracts(EY,2015). More than a mere accounting change Revenue is embedded in most business day-to-day business processes, so a change in revenue recognition methodology has wide-ranging impacts. This is not a mere accounting change. This is a compliance problem with potentially significant business consequences; including price transparency, impact on financial statements, key performance indicators, taxes, etc. The complexity of the implementation of IFRS 15 will depend on several factors. In particular, the existence of varied, complex and long-term contracts with clients is likely to require the management of software to facilitate the necessary change in the time required (EY, 2015) Adoption of Revenue Standard- IFRS 15 Explain The fundamental principle of the model is the fulfillment of the obligations of performance before the clients. IFRS 15 structures this fundamental principle through 5 steps that are developed in a very extensive and detailed way in the standard and its Illustrative Examples. In this publication you will find a description of the most relevant aspects of the standard, and some practical comments. Before starting your reading, and to frame the context of the new model, reflections on its key impacts, which can be grouped into two broad categories: Those related to changes in the temporary imputation of income over time, which can generate substantial changes in the system of recognition of income(Savage et al., 2013. Current IFRSs leave more scope for professional judgment and to some extent can be said to be more flexible when designing and implementing revenue recognition policies and practices. IFRS 15 is much more restrictive and contains more specific rules and examples than IAS 18, IAS 11 or its Interpretations, so that the application of the new requirements may lead to significant changes in the income profile and, in in some cases, in the recognition of associated costs. In addition to the major impacts of changes in the conceptual model, it should not be ruled out that entities may be affected in more detailed matters, since they are now reflected in the standard transactions and practices that previously had no guidance nor comments. As a consequence of this greater regulation regarding the recognition of income, IFRS 15 accumulates, in some of its parts, a great academic and doctrinal content, reason why its reading and understanding can become complex APES 110 Professional Code of conduct in accounting In ethical work for accounting, professionalism should be kept and maintained as it is required under APES 110. Manipulation of accounts to suit a company is punishable under the accounting professionalism act. For slater and Gordon, the company, revenue recognition in work in progress accounting is not bad but revenue is recognized before it is earned which is wrong in accounting principles(Savage et al., 2013). The comparison of the payments resulting from the agreement offered by the debtor with the estimated dividend of a bankruptcy, considering for this the corresponding times and the estimation of the hypothetical process of good accounting. The ethical code of conduct in professional accountants is such that they try to reduce fraud and unethical behaviours that may cloud the accounting department. Mostly, code of ethics are used to ensure that people do not defraud a company and as it is they are allowed to use the principles in accounting to set out the best possible way in having good ethical values. The comparison of the payments resulting from the agreement offered by the debtor with the estimated dividend of a bankruptcy, considering for this the corresponding times and the estimation of the hypothetical process of good financial accounting.The new framework, which focuses on contract performance obligations and the assignment of a price to those obligations should also have ethical standards.However, impacts will go beyond accounting, as different companies may face the need to implement new systems, processes and controls and even how to do business. References APES 110 Code of Ethics for Professional management, available at Savage, A., Douglas, C., and Barra, R. (2013). Accounting for the Public Interest: A Revenue Recognition Dilemma. Issues in Accounting Education, Vol. 28, No. 3, pp. 691-703. (2015).The new revenue standard affects more than just revenue, available at Fyfe, M. (2016). The Undoing of Slater and Gordon, the Age, 24 June IAS 18 Revenue and IFRS 15, both are available at www.ifrs.org (alternatively, AASB118 Revenue and AASB 15 Revenue from contracts with customers, available for download atwww.aasb.gov.au) Slater and Gordon annual reports, available at operations . https://www.apesb.org.au/uploads/standards/apesb_standards/standard1.pdf https://www.ey.com https://www.slatergordon.com.au/investors/reports-and-presentations IASB Framework, available at www.ifrs.or