Professional Accountant and its Objectives Assignment

Professional Accountant and its Objectives - Assignment Example Evidently, accounting standards enhance the stakeholders’ decision-making activities by ensuring that the financial statements comply with the accounting standards. The corporate governance policies of the United Kingdom had changed after the Cadbury report. The Cadbury report emphasized that all financial reports should follow certain rules. The rules include the provisions listed in the Corporate Governance Code of the United Kingdom. The code strictly states that the United Kingdom publicly listed companies should implement all provisions of the code, especially in the preparation of the financial reports. The code prohibits the excesses of the board of directors and other parties within the organization (Solomon, 2011). Cynthia Jeffrey (2011) proposed that rules-based accounting requires that the business entities should comply with all corporate governance rules. Corporate governance includes the board of director’s strict compliance with social responsibility doctrines. Social responsibility includes ensuring all environmental protection laws are implemented. The rules include the procedures in recording business transactions. Rules must be followed at cost. There is no variation in the implementation of the rules. , International Accounting Standards Board Chairman David Tweedie insisted that the United States generally accepted accounting principles (U.S. GAAP) is basically rules-based accounting (Jeffrey, 2011). The United States accounting procedure is historically pegged on rules-based accounting. United States entities implemented the United States generally accepted accounting principles in the preparation of the financial reports. Currently, many in the United Kingdom and other countries use the principles described as international accounting standards in the preparation of their financial reports. The United States-based Financial Accounting Standards Board Chairman David Tweedie insisted that the United States generally accepted accounting principles (U.S. GAAP) is basically rules-based accounting (Jeffrey, 2011).