The Accounting Profession in the 21st Century

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Introduction

In the world where new inventions are taking place at every second , it is hard for any profession to maintain its hold on the business world And especially when we talk about the age old Accounting Profession , We should always look at the changes this profession has gone through in the past decades . In this we are going to discuss the effects of use of modern facilities in the offices such as telephone , fax machines and specially the internet

These days , technology is the absolute necessity for accounting

br profession . In one way it would not be wrong to say that the technology has lead the accounting firms to effective communication . As we know communication is the vital factor in any process same as in accounting And here the technology plays the best role , for example : the client of any accounting firm needs some data from the accountant , this can be done by way of fax and this is very quick and also accurate . Thus , any task that would take at least two or three days can be completed in few minutes by the help of technology

And when we talk about the background of the accounting profession , we would notice that earlier in any trade or business when the transaction took place , there was nothing called passing of entries , preparing accounts etc . But when at the end of the year the business owner wants to decide whether to carry on the business or not , or he wants any other conclusion , there was nothing that can help him out . And this was the main reason of introduction of accounting in the business world

Page : 2 Recent Accounting problems in US firms

In recent years the economy of the United States has gone through some changes that have also brought some changes in accounting methods followed by the accounting professionals . In past few years the companies like WorldCom , Peregrine , Tyco International , etc have faced a dramatic downfall in their stock

In the year 2005 almost 600 companies faced investors ' lawsuits and higher borrowing costs . And about 580 companies admitted the weakness of SEC . According to the analysts , the disclosure of what amounts to the admission of an inability to rule out financial scandal can lead the company to decrease its share price . And this also makes it harder for the company to raise the funds through debts

The companies also complained the shortcomings in filings to the SEC as related to introduction of section 404 of the Oxley Act that is said to be designed to prevent high pro accountancy scandals in the companies

Page : 3 Sarbanes-Oxley Act and its effects on accounting

The Sarbanes Oxley Act of 2002 also known as the Public Company Accounting Reform and Investor Protection Act of 2002 , it is commonly called SOX or Sarbox . This is a United States Federal Law . This act came into force from July 30 , 2002 . The Government decided to impose this law because of increasing numbers of...