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Balanced Scorecard In Hsbc Bank Accounting Essay

CHAPTER 1 In the past decades, many organizations were facing intensive pressures for changes in strategies and structures without a proper human resource management and performance management model (Weng, 2011). It has been a challenge to many managers to measure and appraise their human capital with an increasing and constantly changing volume of employees across the organization at different levels as well as across different geographic locations with high consistency and standards. Therefore, it is crucial that organizations have a strategic management tool. Much debate has been taken to find the most effective way of measuring not only a company’s financial performance but also how the company satisfies its customers and employees (Kocakulah and Austill, 2007). Then in 1992, Kaplan and Norton introduced a BSC model. Their concept of BSC has opened a new field in the literature of management control (Franco and Bourne, 2003). Since then, BSC has been an interesting topic that many academic authors choose to write. The reasons why the researcher is interested to write about BSC are as following.
First, it is essential that performance measurement be of great significance to an organization, playing as a tool in conveying the company’s strategies to individual’s objectives (Smith and Kim, 2005). Drucker (1954) also highlighted that all employees, from a big boss to a junior clerk, should have personal performance objectives that aligns strongly to the company’s strategy. Therefore, the application of BSC really helps organizations to depict such objectives evidently. According to Kocakulah and Austill (2007), when structural changes and job specifications become more complex, it is required to develop a methodology and formula that can align the organizational strategies and main principles with performance measurement and management indicators. Kaplan and Norton (1992, cited in Kaplan, 2010) recognized that any comprehensive measurement and management system has to link operational performance improvements to customer and financial performance.
Second, BSC was presented as the most practical and comprehensive performance measurement model and has then become a popular strategic tool amongst managers all over the world (Sanayei et al., 2011). In recent years, the BSC has been a comprehensive model when looking at management issues for financial and non-financial purposes and has been very popular as it attracts a lot of attention (Norreklit, 2000). It has been widely used by many companies and has gained worldwide acceptance as a useful tool for management. From 1992 to 2000, more than 200 companies adopted the BSC method (Kaplan and Norton, 2001 cited in Kocakulah and Austill, 2007). In 2001, David Norton estimated that about 50 percent of large organizations in the United States were using the BSC, about 45 percent in Europe; and about a third of the large organizations in Australia used the BSC (Weber et al., 2001 cited in Kocakulah and Austill, 2007). Another recent study by Bain

The Need Of Accounting Standards Accounting Essay

In the course of this essay, the topic that will be discussed is the importance of having international accounting standards. If we merely look at accountings’ basic purpose of accounting standards, it is to facilitate the provision of financial information as well as, to give a clear picture to corporations’ investors of their cash inflow, assets, equity and liability , revenues and expenditures etc. Accounting has existed for a number of years, since the time of the Islamic era, however Islamic accounting is strictly based on religion (Sharia system) and it is not based on geography. (Napier, C, 2009)
A religious base accounting system is not commonly practiced today; it is because in time accounting was allowed to grow and evolve with the help of accountants who have managed to create various kinds of accounting methods that are used in different continents round the globe. (Napier, C, 2009)
In view of the fact that several conferences and debates have been held as to whether the international accounting standards should be implemented world wide. This essay will elaborate as well how certain industries reject the idea of having International Accounting Standards. Although accountants have been able to come up with innovative accounting standards over the years, and yet we are still not successful in having a single method that satisfies all.
The question, therefore, arises as to how to ensure that accounting standards are meeting global needs?
Accounting Standards Having standards is essential; however currently there are different standards that are being practiced. The International Accounting Standard Committee (IASC) was established in 1973 to create accounting standards. There are 41 standards that have been issued by the (IASC) which has been accepted as an international standard apart from Japan, Canada and the United States. (M.V. Kali Prasad, 2006)
In the summer of May 25, 2000, the US Securities and Exchange Commission suggested the acceptance of IAS for use in cross border. The following year the international fraternity of accounts took stock of the situation and constituted the International Accounting Standard (IASB) to evolve and prescribe norms for treatment of several items in the preparation and presentation of financial statements. (M.V. Kali Prasad, 2006)
The US Financial Accounting Standard Board (FASB) has the intention and undergoing series of procedures that would eliminate the differences in some of the standards. (Beresford, Dennis R.1998)
Although such action and decision are taking place, the banking industry stands firm with their belief and disputes. Bankers express how the FASB would limit the banks’ ability to manage risks as well as only certain financial assets and liabilities would be marked in the balance sheet. (Beresford, Dennis R.1998)
The Need for Accounting Standards Over time it has been proven that International Accounting Standards needs to be implemented particularly after, the famous corporate scandals, involving Enron and WorldCom etc. It resulted in widespread of fears of losing public confidence and the need to strengthen internal controls.
According to a number of analysts they believe in order to regain confidence following the scandals, where accounting fraud was discovered. Accounting profession should create a transparent as well as explicit rule that applies world wide. (Vass, P.1990) With having such an International Standard enforced it allows information to be evaluated within the same industries, without being concerned where the company is located. It is critical to have a standardized accounting; firstly the strategic decision making would be a lot more accurate and secondly increase in confidence. (Vass, P.1990)
Accounting Standards could differ, even within the same country if the International Standards are not enforced. For instance public and private sectors were seen to be different. The public sectors were concerned about services which met from taxes, as opposed to private sectors where they concentrated more in profit, sales and turnovers. (Vass, P.1990) On the other hand if the accounting system were standardized that would bring authority simultaneously and everything would be a lot more transparent as well as consistent regardless if it was private or public sector. (Vass, P.1990) If such measures are not taken then, the accounting system credibility could be damaged particularly if one refers to previous scandals. One school of thought believe that International Accounting Standards is committed in developing, the public interest, by setting a sole set of high quality, understandable and enforceable global accounting standards that require transparent and comparable information in general financial statements.
Indirect advantages to investors arise from improving the usefulness of financial statement information in contracting between firms and a variety of parties, notably lenders and managers (Watts, 1977; Watts and Zimmerman, 1986).
Conclusion The need for International Accounting Standards is essential; however there are a lot of obstacles that needs to be addressed and put into consideration. As mentioned earlier, the banking industry opposes in having such a standard, however if we look at Dubai, United Arab Emirates, with the excessive borrowing and lending with International banks in construction projects, caused “Dubai World” to collapse, as a result it put Dubai in great debt, this is a classical example for the need of International Accounting Standards, where Investors are protected, with transparency that would allow investors to make an accurate decision. There have been numerous incidents that have occurred in the past decade that indicates the need of a universal standard.
Despite the obstacles that may be encountered in developing a concrete framework of International Accounting Standards and trying to create one global accounting system however it is a gradual process for countries to migrate and adopt this system. Some believe that with the adoption of such a standard, this would assist in global economic stability.