It could be argued that the traditional form of accounting has been beneficial to the capital markets and management often to the detriment of shareholders and society as a whole.
The various corporate failures over recent years and the current pandemic has highlighted the fact that the current accounting rules do not allow companies to be financially robust to be able withstand extreme changes in the economic and social environment.
Also, with the increasing awareness of how companies are adversely affecting the natural environment and the social environment with their manufacturing and other processes there is a growing need for accounting to change in order to reflect the needs of society which now sees sustainability and ethical corporate behaviour amongst other factors as important objectives.
REQUIRED
You are to write an individual report clearly identifying the following:
Critically evaluate the first paragraph of the assignment by using appropriate accounting theories and practical examples how the ‘traditional’ form of accounting has supported the capital markets in the UK.
Critically evaluate the second paragraph of the assignment brief drawing upon relevant accounting theory and research as well as providing practical examples to illustrate the points that you are making
Critically evaluate the third paragraph of the assignment brief drawing upon the relevant accounting theories pertaining to social, environmental accounting and business ethics to state whether in your view, there should be changes made to the accounting rules to reflect the social and environmental needs of society.
Drawing upon the research in relation to parts 1-3 above complete your assignment with an appropriate conclusion.
