Read the text to find out what important trends will bring forth in the 21st century accounting.

What will accounting be like in the future? This is not an easy question to answer. It is well-recognised that accounting has played a crucial role in the development of human society. The medium of accounting itself is thought to have a great impact on economic thinking and economic activity in all countries of the world. The enormous growth of industry in the twentieth century has expanded the boundaries of accounting and, as a result, the needs for accountants have increased. Some accounting experts believe that this trend will continue in the 21_st century as well. New dimensions of accounting will be recognised and its comparatively new fields will be dynamically developing. The very terminology of accounting will be changed to bring forth "social accounting", "green accounting", "tax accounting", etc.

In the 21_st century the world will continue to move slowly towards a single economy. As trade and investment flows expand, this tendency will certainly contribute to an open global economy. As a result, there may appear more favourable conditions in the future for developing the uniformity of international accounting standards. Harmonising accounting standards internationally will improve the comparability of accounting information throughout the world and will to greater international understanding of accounting practices. In turn, more comparability will improve the analysis of financial statements. A single set of financial accounting standards will also save corporations' time and money since they will no longer have to multiple sets of financial statements. In a word, establishing international standards, accepted in many countries, is believed to raise the quality of accounting throughout the world.

At present, however, there are many problems on the way of setting such international standards. One is that accountants and users of accounting information have not been able to agree on the goals of financial statements. Another problem is certainly the differences in the way in which the accounting profession has developed in different countries, not to speak about differences in the laws regulating businesses, differences in the requirements of governments and other bodies. And still other differences are the ones that exist among countries in the basic economic factors affecting financial reporting, and inconsistencies in practices recommended by the accounting professions of different countries. While last but not least, there are opponents among accounting experts in different countries in relation to setting up accounting standards internationally. They think it would not make much sense to impose harmonisation because user needs are not similar internationally. And accounting is relevant only when it is responsive to the business environment in which it operates. Thus, there are grounds to think that the tendency of harmonising accounting standards internationally will continue to develop in the future, but its implementation will require time and organised efforts on the part of international accounting organisations.

One of the biggest problems facing the accounting profession is the necessity of rapid adaptation to the changes taking place in organisational structure and information processing throughout the world. Under modern conditions production and new manufacturing methods are developing very rapidly. And very often these new developments make some accounting methods out of date. That is why in many countries of the world present accounting methods are sometimes criticised. And that is quite justified. The most common criticised point is that traditional accounting methods cannot be applied to production systems which change to adapt to the environment. The reason for that is that production runs have become shorter, because machine tools have to change very rapidly to meet the demands of the time.

Another deficiency for which accounting is often criticised, lies in the fact that management accounting cannot very often measure any costs accurately. Suffice it to say that the present cost accounting systems do not show the cost of particular products. No wonder that production managers find that accountants cannot sometimes give them reliable information to make proper decisions. Some accounting experts think that without rapid changes in their profession, management accountants will not be needed by management in the future. Under the conditions of rapidly developing production, emphasis should be placed on the necessity to make accounting systems consistent with the forms of organisational structure and patterns of responsibility which can cope with the inherent uncertainty and provide necessary elements of adaptiveness.

Another important trend to play a significant role in accounting throughout the world is certainly connected with computerising accounting work.

There is no doubt that information technology will be more extensively used in accounting practices of the future than it is now. So, accountants of the 21_St century will view themselves in the new role, because they will entirely leave their accounting chores – book­keeping to electronic equipment. Accountants will be exclusively concerned with the valuation techniques that are used in assessing financial condition and results of operations as well as evaluating through analytical review techniques the relevance, reliability and consistency of financial data. As a preparer and user of accounting information, the accountant of the future will be much more involved in system design activities. So, he will have to consider and analyse the organisation's structure and the flow of information through various organisational units, and the implication of internal control.

Date: 2015-12-24; view: 745