Examination of financial records has become increasingly important.
In light of the financial crisis that hit the world scene beginning in 2008, financial authorities have placed a greater emphasis on accountability and transparency in all financial sectors. As the International Auditing and Assurance Standards Board notes, the accounting industry has been affected by this need for greater transparency also. As financial regulators move forward, and as the world economic scene continues to change, accountants will face several different challenges.
Bookkeeping
Bookkeeping is one of the most basic yet significant challenges faced by accountants. Accountants must be able to maintain accurate and detailed records of all clients or, if they work for a company as a staff auditor, the corporation they work for. In the aftermath of scandals like Enron and Bernard Madoff, accountants must make the appropriate strides to keep extremely accurate records and remain accountable to regulatory bodies within the industry.
Accounting in a Service Based Economy
In a 2004 speech by Governor Susan Bies to the Cincinnati Chapter of the Ohio Society of Certified Public Accountants, reported by the Federal Reserve, the need for learning to provide accounting services in a service-based economy was listed as a newly emerging challenge for accountants. She notes that in this type of economy, the earnings process with a customer begins with the sale of a service rather than terminating with the sale of a product. The accounting profession in general must adapt to this new type of economy to establish accounting procedures to deal with this changing landscape and accountants must adapt to these changes.
Fair Value Accounting
The International Auditing and Assurance Standards Board notes the need for accountants to be able to perform audits on the basis of fair value for financial investment vehicles. In the aftermath of the financial problems that began to emerge in 2008 and 2009, accountants must be aware of the potential for accountants to either misinterpret financial data or be misled because of the inability to obtain accurate market information. Accountants must have extensive knowledge of market valuation techniques to ensure that they are assigning the proper value to investments.
Ethics
The issue of ethical accounting is closely tied to the increased regulation in the accounting industry and the need for fair market valuation. Accountants in the newly emerging economic climate must adhere to a higher ethical standard than has been maintained in the past. In an economic climate where it may be tempting to bend the rules to make a fortune, accountants must be careful not to cross legal boundaries that could later put them in hot water with the regulatory authorities. This is also closely tied to bookkeeping efforts, but it goes beyond simple record-keeping to include business associations that accountants keep and the activities they are involved in outside the office.
