The Financial Accounting and Standard Board (FASB) and the International Accounting Standard Board (IASB) apply to the AT&T Mobility because both are proposing changes in global accounting. Moreover, their rule provides more incentives for companies particularly in changing the terms of the contract in corporations to speed up revenues to achieve quarterly targets. Additionally, the treatment of revenues in AT&T Mobility, the proposal for the changes, may drive the inconsistent allocation of income in particular between its products and payable resources as well as the separation of hosting arrangements. Consequently, AT&T have changed its GAAP accounting to redefine the cost of pensions, and sometimes eliminate such costs to make an adjustment to its earnings.
Benefits for complying with the regulations
The high quality of the accounting standards is necessary, especially when developing eminence of the general structure of accounting reports in corporations (Gayer, 2011). Similarly, diverse accounting traditions have been developed around the globe to different needs of the users for whom the financial information is prepared. Moreover, superior accounting standards are made up of a comprehensive set of impartial principles that needs consistency, reliability, relevancy, and comparable for the investors, creditors, the lenders such as financial institutions, and other users of accounting information who usually make decisions concerning capital allocation. Therefore, compliance with the accounting regulators is crucial to the efficient running of any market economy since decisions regarding capital allocation depend heavily on the credible and understandable financial information.
Secondly, the regulators such as the Financial Accounting Standards Board improves financial reports of the company for the investors and other users of the financial information in the capital markets. This is achieved by the regulators after setting the highest quality standards or the Generally Accepted Accounting Principles (GAAP). That is it provides the users of financial statements with relevant information to their needs as well as considering whether the expected benefits of the information validate the costs of provision and use.
Thirdly, the regulators develops internal quality control systems that rely on the domestic and international operations of any company. Since most audit clients have shifted their attention to international activities, the accounting regulators have permitted them to follow suit and operate on the global basis. Consequently, the quality control in various companies will rely on the separate systems of the government, and this may not be actual in a global operating environment. With the absence of the regulators, the audit companies could not have developed and maintained adequate internal systems of quality controls at the international level.
How accounting regulators such as FASB work together with the AT&T Mobility
According to the belief of FASB, it seeks a comparable international accounting standard, thereby improving the quality of accounting standards that is applied to the world while decreasing the dissimilarities among such standards that are consistent with the key mission. Likewise, the AT&T Mobility will benefit from the increased comparability that is as a result of the closer alignment of standards applied internationally.
The comparable standards will potentially limit the costs for the users and the preparers of the financial statements in AT&T Mobility. Thus making the capital markets around the globe more efficient. Additionally, the Securities and Exchange Commission also expect FASB to make a consideration of the developing standards, the degree to which comparability is appropriate as per the interest and protection of the investors of the AT&T Mobility. In its standard checking, the accounting regulator evaluates whether the financial reporting should be improved through the implementation methods with specific International Financial Reporting Standards. Consequently, it will promote global comparability for the benefits of AT&T investors and the participants of capital markets.
Role of ethics in regulatory environment
The ethical behaviors play important roles, especially where the legal and regulatory framework is governing the conduct of the business (Onyebunchi, 2011). However, such conducts are sufficiently new and complex, and its propriety cannot be ascertained through traditional ethical principles. Therefore, ethics is important, especially when the focus relies on the conduct of the company contrasting to individuals. Since the accounting profession is serving the interest of the public, the accountants should understand their expectation to make the effective response in future. For instance, during the major accounting scandals in the 2000s, both investors and creditors lost their investment that ranges from millions to billions of dollars. Consequently, the Congress accent the Sarbanes-Oxley Act of 2002 to bring back the public confidence and trust in the reporting of financial statements in public companies.
The SOX Act was crucial because it brought ethical implications in accounting for corporate governance, and regulation of the profession. Still on the ethical issues, the Sarbanes-Oxley Act put more emphasis on the relevance of internal control systems by the firms by ensuring that there is compliance with the laws and regulations, safeguarding the net worth of the company, promoting accountability and responsibility for the assigned duties. Therefore, the ethical conducts may prevent the managers of any business to make falsified information on its financial records. That is the recognition of the profession of accounting is strictly related to the maintenance of the good ethical values. This will make competence in the ethics be a vital part of being a professional bookkeeper.
In conclusion, the regulatory environment directly influences the role of employees in that the accounting codes of professional behavior always affect the conduct and the practicing judgment of the accountants (employees). Similarly, these codes of conduct contain some technical and ethical guidelines that can enable employees to fulfill their professional responsibilities with competence and integrity.
References
Gayer, T. (2011). A better approach to the Regulatory Environment. Getting the Costs and Benefits Right.
Onyebunchi, V. (2011). Ethics in Accounting. Internal Journal of Business and Social Science, 2(10).
