A letter has been issued to the heads of Senate Banking Committee by the American Institute of CPA’s, pledging them not to permit the systemic risk regulator to amend the accounting services standards in the financial regulatory reform legislation which they are they are planning out.
This letter is basically an effect of a letter sent to the Banking Committee by the trade groups, who pressurized the committee heads for a Bill that had been undermined in the financial regulatory reform legislation of December. This bill included the authority of the Financial Stability Council to alter and revise the accounting standards that could be dangerous for the stability of the U.S. financial systems.
The letter sent by the industry groups asked for considering accounting policy as part of financial reform and “to address potential systemic risks associated with accounting policy.” However, AICPA responded in its own way and propelled a response to the traders’ letter in which they protested to the fact that systemic risks can be linked with accounting policy and urged the requirement of an independent accounting standard-setting process for financial accounting services.
Any type of business cannot survive without an efficient system of managing finances. The business accounting model that the business owner chooses sets the foundation for effective or ineffective management of finances.
There are different models for business accounting. Each one has its own pros and cons. In fact, the success is when one is able to find a model that is well suited to the business needs. When divided into broad categories, there are two types of business accounting. The first one is the good old manual accounting and the second one is the computerized accounting.
In the manual accounting, both the records are maintained and the calculations are done manually; whereas, in the computerized accounting, as the name suggests, some particular accounting software takes care of all the matters of business accounting.
The small-scale businesses having 2 to 5 employs usually rely on the manual accounting. However, as the business expands and the head count increases, it is very hard to keep the track of financial matters manually. This is the time when the accounting software is required.
For the business accounting, having the software offers many significant advantages. For example, the software is able to manage a large head count from different departments. The software is quick and reliable as compared to the manual accounting. It also provides an easy solution to storage of all the finance related records.