INTRODUCTION
Most studies on the subject consider that the cause of irregularities and the professional crisis lies in unethical and immoral behaviors and only a few refer to the ambiguity and irrelevance of accounting standards. It happens that irregularities and the accounting professional crisis are manifested in academic, social and ethical dimensions. All of them have deserved some level of attention from scholars. But its cognitive dimension has not yet been analyzed in depth, a dimension that is the ultimate foundation of the previous ones. The cognitive dimension refers to the mental schemas that each professional group in general and each professional in particular possess.The mental schemes are a consequence of the adoption of certain basic principles and concepts of the doctrine or theory of the profession. Conceptual frameworks are constructed with the theory or theoretical foundation of the profession that come to be the reflection of conceptual mental schemes; With the doctrine or system of norms or rules of the profession, normative frameworks are constructed that come to be the reflection of normative mental schemes.
With this in mind, we consider that both conceptual frameworks and normative frameworks serve as the basis for an in-depth understanding of the theoretical or normative shortcomings of the profession and thus attack the professional crisis at its roots.
1. THE COGNITIVE DIMENSION IN THE ANALYSIS OF THE PROFESSIONAL CRISIS
Accounting irregularities have produced an accounting professional crisis of unsuspected dimensions. Both governments and professional associations and users of accounting information have had to react immediately. Studies have been initiated in the professional accounting community to explain these processes. Most of these have focused on the study of the accounting process or on the ethics of those who have participated in the criminal acts. We believe that a deeper level of investigation of the cognitive dimension is lacking in the analysis of the professional accounting crisis. In other words, take care of what is lacking in our theory, in our regulations and in our instruments to avoid crises such as this one called “loss of public confidence”. But, how come accounting irregularities have occurred,what causes and effects have they had in the accounting profession.
1.1 Accounting irregularities
We all know the most famous "financial scandals" such as Enron, Waste Management, WorldCom, Tyco, Parmalat, etc. And many others in almost every country in the world. As a result of these scandals, we have seen the reaction of governments and professional bodies. The most famous reaction was the US "Sarbanes-Oxley Act". that established a new official Accounting Standards Board replacing the traditional accounting standards function of the North American Institute of Public Accountants (AICPA). Other countries and the European Community have taken similar actions. Despite these actions, we are losing the war against corruption, both in the public sector and in the private sector… and throughout the world.
Let's see background. In 1992 the annual cost of "white collar crime" in the US was estimated to be $ 250 billion. At the same time, it was estimated that the cost of all “street crimes” (robbery, assault, kidnapping, etc.) reached 18 billion dollars, that is, just 6% of the cost of sophisticated crimes in the business. According to the FBI in 1992 the total amount lost due to violent bank robberies in the country was 35 million dollars. But the amount lost in a single embezzlement from a savings institution in California that same year was $ 3.4 billion. A 2002 study by the Association of Fraud Examiners (ACFE) suggested that fraud can result in the loss of approximately 6% of a company's annual revenue. Applying this to the gross domestic product of the USA,fraud losses amount to about $ 600 billion or $ 4,500 for each employee.
According to a 2003 Economic Crime Survey conducted by Price WaterhouseCoopers based on interviews of 3,623 entrepreneurs from 1,000 largest companies in 50 countries: 37% reported significant economic crimes during the previous two years, Larger companies have more economic crimes than medium and small, theft of assets is the most frequent crime and is also the easiest to detect (60% of reported crimes were of that type), The average loss among companies was more than two million dollars, 3 / 4 of the reported crimes did not recover more than 20% of the losses, only half of the interviewees had insurance against economic crimes, in Latin America 38% of the businesses interviewed reported economic crimes and in North America 41%,All industry and commerce is subject to such crimes and the most risky are: banking, insurance, telecommunications / media, and services. The two areas of greatest concern for the future are: asset theft and cybercrime. There are many more similar statistics and reports.
1.1.1 Causes of accounting irregularities
To determine the causes of accounting irregularities, we have considered analyzing empirical data from 06 companies and especially what happened with the emblematic cases of fraud: Enron and Parmalat, Based on the previous Doménec Melé in your work, how do financial scandals originate? proposes four possible causes. We believe this framework of understanding is sufficient to generalize it in further analysis (see Annex to the paper).
Resources catchment
Companies in general needed to capture resources from their environment to face their plans, sometimes due to the urgent need to achieve certain goals, and others to take advantage of the opportunity to obtain higher growth. In Enron's case, there was enormous pressure not to lose the credit rating. They bet on getting into more and more debt, entering new businesses and putting more aggressiveness into getting new contracts. But those businesses did not have the expected success. Also in Parmalat, the financial turmoil, a very strong expansion and, as a consequence, a strong indebtedness, were undoubtedly a temptation to start an endless tangle of counterfeits and frauds.
Decision making
In business decision-making, various factors concur, among which the objectives imposed by management are not negligible, accompanied by certain incentives to achieve them and the process established for decision-making. If behaviors exclusively aimed at maximizing profits are encouraged, it is not unusual for fraudulent actions to occur when the pressure for results is extreme. In recent years, Enron, along with very ambitious targets, offered unfair incentives to sellers who got new contracts.
Regulation and control
When sectoral laws and regulations are deficient or not very demanding, fraudulent actions are favored. But even with mediocre laws, or with a lack of compliance, internal rules and effective control can be created, including the action of audit committees within the corporate governance of companies. In the US, it is often frowned upon to act outside the law, and lawyers are often used to demonstrate that the action has been legal. That is exactly what Enron did, complying or pretending to comply with the law; although, in fact, it was only adjusted to the letter of the law. The deficiencies of certain US laws were revealed. In Parmalat, along with the most gross forgeries, diversions of funds were also carried out, looking, no doubt, for recesses to the law,including the creation of interposed companies and resorting to the peculiar situation of the Cayman Islands.
Corporate culture
The corporate values presented and exposed by Enron were: Respect, Integrity, Communication and Excellence. They had been established by Enron CEO Ken Lay. However, the actual values in Enron's culture were quite different. According to former employees of this company, the only interest of Lay was exclusively the performance in everything that increased profits and, consequently, the share price. This 'value' was put ahead of integrity and excellence, transparency in communication with the market and perhaps also respect for people - turned into mere instruments by inhuman pressure. Parmalat's declared values were oriented to its consumers, however, in the financial area, there were very different 'values' that finally predominated in the company.In other words, fraudulent actions are not only influenced by business culture, but in turn create culture, and that culture tends to spread.
Of these causes only the third has to do with the accounting profession directly, the others are due to policies and forms of corporate governance of the main leaders of companies or organizations. But, such causes would not manifest themselves without some direct or indirect participation of the accountant. That does not invalidate the profession, but the person, because it has to do with his morals and his professional ethics. Now let's see how accounting irregularities manifest.
1.1.2 Basic forms of accounting irregularities
The basic forms of accounting irregularities are manifested by some action or inaction of the accountant.
Financial situation makeup
The objective of balance sheet makeup is to show a more favorable financial situation for the company. Irregularities in accounting records or reports for any fraudulent purpose may be "employee fraud" or "management fraud". Employee fraud refers to dishonest acts carried out against the company by its employees. Management fraud refers to a deliberate falsehood made by the top management of a business to people outside the organization of the business, tending to mislead investors or creditors, hiding the truth. All this naturally entails having to make false entries during the course of the business year, which will alter the balance sheet status when it is formulated.
Accounting tax evasion
Most of it occurs due to immense tax pressure. As a result, a noticeable drop in fiscal morale should be noted. These state influences have acted perniciously on economic life and have besieged many owners who, in many of them, have grown the feeling of being, in a certain way, in the case of legitimate defense when proceeding to conceal the truth of their goods. This state of affairs has exerted demoralizing pressure. From this to the distortion of the balance there is only one step.
Profit manipulation
This fraud presupposes a reduction in the commercial tax capacity or in the income subject to inspection. They are difficult for employees to carry out, but they are totally within the reach of any employer. They serve private interests, to the detriment of business.
Violation of accounting standards
He who writes down an accounting entry must necessarily choose the meaning of it and dominate the form; for, when transferred to practice, the theoretical demand for Truth and Clarity does not mean anything other than every operation must find its accounting according to its meaning and correct in its form. The illicit ways are only adopted due to ignorance of the meaning or because it is not confessible, and also due to ignorance or inaccuracy of the form.
PwC has identified more than 150 generic fraud schemes that fall into six basic categories: Fraudulent financial reporting, misappropriation of assets, disbursements and liabilities with improper purpose, income and assets obtained from fraud, costs and expenses avoided through fraud, misconduct by senior management.
The manifestations of accounting irregularities have catastrophic effects for the accounting profession. These effects question the very relevance of the profession to provide its services in organizations, having an adequate image that provides security and confidence in what they do and say.
1.1.3 Effects of accounting irregularities
Accounting irregularities produce a series of effects, for reasons of our investigation we will deal with those that make direct reference to the accounting profession. Accounting irregularities allow: Attacks on TRUTH (entries contrary to good sense), Attacks on CLARITY (deformed entries).
The one who makes up a balance is not going to get USEFUL information and will not be pertinent or reliable. It is not relevant because it has no feedback value, no predictive value, and it is not timely. It is not reliable because it is not neutral, nor verifiable, since it does not accurately represent economic facts.
When analyzing the empirical cases selected in our research, we identified the Accounting Principles related to the effects of accounting manipulation: Economic Entity, Continuity, Valuation or Measurement, Essence on form, Realization, Maintenance of Patrimony, Sufficient Disclosure, Relative Importance or Materiality.
But above all the Prudence principle since it is violated because unreliable or verifiable events are recorded, overestimating assets and income or underestimating liabilities and expenses or vice versa.
The above are the consequence of insufficient regulations and unethical and unethical professional activity. That is why, in the end, it produces a crisis in the profession, a crisis not only related to standards or ethics, but especially to the relevance of the profession in a society in need of transparency.
1.2 The accounting professional crisis and the misnamed Creative Accounting.
The most direct effect of accounting irregularities on the accounting profession is the crisis of lack of confidence. The accounting professional crisis has manifested itself in different ways, in this work we will classify them into three dimensions that are closely interrelated. Academic, Social and Ethical.
Previously, it is essential to analyze a professional technical conduct wrongly called "creative accounting", due to our criteria being called pseudo accounting. That it has been the result of the flexibility of certain accounting standards which facilitates the manipulation, deception and misrepresentation of the information. This basically consists of taking advantage of the gaps in the legal regulations regarding the different possibilities of choice in order to transform the accounting information presented in the companies' financial statements. Accountants and advisers who use this professional conduct apply their knowledge of accounting standards to "make up" the figures reflected in the company's accounting, while still complying with accounting principles. In recent times and as a consequence of the financial crisis that has affected large international companies,Creative pseudo-accounting has become especially relevant, casting doubt on the data presented, as well as the credibility of auditors and advisers. Discussions on the reasons that have led some companies to implement such accounting have focused primarily on the impact that they may have on the decisions of investors in the Stock Market since they have used "accounting tricks" to deceive investors. investors. Among the reasons that the managers of the companies that list their shares have, to try to manipulate the accounts are the following: they prefer to reflect a stable trend in the growth of corporate profits,Maintain or "increase" the share price by making the company appear to be exposed to less risk (reducing debt or creating the appearance of an increasing profit trend), delaying the arrival of information to the accountant on the stock market and taking advantage of the opportunity to benefit from your inside information.
Accounting, as it is currently regulated, does not reflect or report on reality, but "only follows the rules", leading to transformed annual accounts in companies. This is due to the predominance of a legalistic vision when it comes to preparing company accounts, that is, it prepares by applying the rules, regardless of the reality.
1.2.1 Academic crisis
The academic crisis manifests itself in the lack of rigorous and technical support for the accounting standards that guide professional activity. So there is no doubt that the current credibility of international accounting standards is in question. As a sample, a recent study by PricewaterhouseCoopers can be mentioned, which shows that only 20% of analysts, investors and executives consider that the information prepared in accordance with current accounting standards is very useful to know the faithful image of companies. Among the deficiencies in accounting regulations, the following should be highlighted: International accounting differences that make comparison difficult, the acquisition price takes precedence over the book value from reality, the absence of most intangible assets in the annual accounts,creative pseudo accounting.
The academic crisis will have to be overcome with the establishment of more rigorous norms and with much more severe and binding controls, instead of the issuance of only opinions. The norms that are adapted to the new realities will be supported by deeper research, carried out with the most demanding methodologies from the epistemological perspective. For this reason, we consider that the exit from the academic crisis is directly related to the intellectual activity of the foundation of the most competent accounting professionals.
1.2.2 Social crisis
The society, in the face of the numerous business scandals that have occurred in recent years, demands from organizations that managers and their technicians, including accountants, carry out ethical management and that they assume the responsibilities that derive from their actions. Internationalization intensifies the changes that companies have to face, changes occur, not only in their external environment but also internally. Thus, the diversity of professionals that organizations have can lead to the generation of conflicts that require adequate values for their resolution, people have to be more universal, moral contagions are faster, competitiveness is increasing. Companies, in the circumstances described,They often seek ways to regulate and even control behavior through ethical principles and codes. "In this context, organizations have to be concerned with creating value, attracting and retaining valuable people and offering a transparent environment internally and externally" (Eighth Annual Ethics Conference, 2000). This means that society requires from its professionals greater transparency in the fulfillment of their functions, or at least, the explicitness of their tasks in the form of norms and rules subject to control. The solution to the social crisis of the accounting profession is unique: to fulfill technically impeccable professional work and impeccable ethics.attract and retain valuable people and offer a transparent environment internally and externally ”(Eighth Annual Ethics Conference, 2000). This means that society requires from its professionals greater transparency in the fulfillment of their functions, or at least, the explicitness of their tasks in the form of norms and rules subject to control. The solution to the social crisis of the accounting profession is unique: to fulfill technically impeccable professional work and impeccable ethics.attract and retain valuable people and offer a transparent environment internally and externally ”(Eighth Annual Ethics Conference, 2000). This means that society requires from its professionals greater transparency in the fulfillment of their functions, or at least, the explicitness of their tasks in the form of norms and rules subject to control. The solution to the social crisis of the accounting profession is unique: to fulfill technically impeccable professional work and impeccable ethics.fulfill a technically impeccable professional work and an impeccable ethics.fulfill a technically impeccable professional work and an impeccable ethics.
1.2.3 Ethical crisis
Today, the belief that ethical behavior and efficient performance are two inseparable components of professional excellence is increasingly shared. In this line of thought, we consider that the accounting professional should take into account the ethical dimension in the performance of his professional activity. Well, today we see that the most emblematic frauds like Enron or Parmalat have been executed by real criminals. The way out of this ethical crisis, which is central to the accounting profession, must be sought creatively and through self-regulation. But, it is good to emphasize that self-regulation, although it can be an effective instrument for promoting professionalism and ethical excellence, is usually insufficient to improve ethical quality in organizations,if it is not accompanied by the exercise of a set of virtues, personal integrity and professionalism of company leaders at all levels.
1.3 The cognitive dimension of the accounting professional crisis
The accounting professional crisis manifests itself in the academic, social and ethical dimensions. All of them have deserved some level of attention from scholars. But what has not yet been analyzed in depth is the cognitive dimension of the accounting professional crisis. For in the end this dimension is the ultimate foundation of the previous ones. The cognitive dimension refers to the mental patterns that each professional group in general and each professional in particular possess. Now let's analyze.
1.3.1 The problem of the conceptual framework
The theoretical-conceptual framework is a system of propositions linked by the relationship of deductibility and a common topic. Whether well organized or sloppy, a theoretical-conceptual framework is supposed to contain only reasonably precise, not confused or ambiguous concepts.
The theoretical-conceptual framework in Accounting plays a foundational role, first of all. The second role that fits the theoretical-conceptual framework in Accounting is a totalizing function. In other words, since science advances in the direction of increasing specialization, which supposes an increasing fragmentation of knowledge, this analytical line is compensated by trying to recompose the fragments; trying to make synthesis of the state in which the knowledge is, or, of the set of the knowledge. So, this task is to be permanently totalizing, incorporating new hypotheses, new theories, and from there reviewing a world view, reviewing the same assumptions of human knowledge as it encompasses intuitive knowledge, knowledge of some areas, etc.
Given the current accounting professional crisis, a new theoretical-conceptual framework is required. Because it obeys the natural logic of the development of doctrine, science and the accounting profession. Because if we have problems in providing an adequate explanation of the reasons that caused the accounting irregularities and why the profession was not prepared to detect and correct these anomalous acts, it is because the current theoretical-conceptual framework was not prepared for such events. In other words, the current theoretical framework has implicated these acts because it has made it possible, even though said phenomenon was exclusively of an ethical nature.This means that the current theoretical-conceptual framework in accounting is in trouble and should be significantly modified based on in-depth review studies sponsored by the entire accounting professional community.
1.3.2 The problem of the regulatory framework
A technological standard, as in the case of Accounting, is a prescription for action. Typically, its form is 'to achieve the Type 0 objective in Type C circumstances, perform the Type A action (or actions)'. Even a norm that is never respected can really drive people to act. Norms are conventional rules of behavior invented or adopted in the belief that they are conducive to certain goals.
The following are some of the characteristics of the norms or social conventions: 1º. Because they are built, standards can be changed or abandoned entirely. 2nd. Every rule is supposed (justifiably or unjustifiably) to benefit someone. 3rd. Even the most foolish rules must be compatible with certain laws, if they were not, they could not be imposed. 4th. Although all standards must be compatible with relevant laws, some are more efficient than others, in particular the most efficient are explicitly based on statements of scientific social laws.
And the regulatory framework is the explicit, necessary foundation of the regulatory system of the profession in question. That is why the accounting profession also has accounting standards that serve them for action and these have regulatory frameworks. The normative frameworks are based on the theoretical-conceptual frameworks.
Now let's write down the reasons why the regulatory framework in accounting is in trouble. In order not to disappoint the expectations of users, profound changes are required in international accounting regulations and their supervision. Let's analyze some aspects of IAS (now IFRS), which we will generally call accounting standards, in order to determine the most essential problems: Accounting standards, as noted by some studies, have 122 types of transactions capable of applying creative pseudo-accounting practices. Thus, in relation to the problem of international accounting differences, accounting standards can contribute decisively to the disappearance of accounting differences between countries. However,the problem of accounting differences is within the accounting standards themselves given the great variety of accounting treatments. Here's the reason why we need a new regulatory framework. Therefore, even if all the countries are applied to the same accounting standards, if they do not reduce the great variety of alternative treatments accepted, there will still be accounting differences between the companies. The agencies involved need to minimize these alternatives so that all companies that apply IAS (or IFRS) speak the same accounting language.If these do not reduce the wide variety of alternative treatments accepted, there will continue to be accounting differences between companies. The agencies involved need to minimize these alternatives so that all companies that apply IAS (or IFRS) speak the same accounting language.If these do not reduce the wide variety of alternative treatments accepted, there will continue to be accounting differences between companies. The agencies involved need to minimize these alternatives so that all companies that apply IAS (or IFRS) speak the same accounting language.
What has been said so far shows that the regulatory framework is in trouble and requires a substantive reform to enable the issuance of accounting standards consistent with the new realities. The reform of the accounting regulatory framework must be supported by a new theoretical-conceptual framework in order to have coherence, univocity and efficiency in its practical application.
2. THE CRISIS OF PARADIGMS IN ACCOUNTING
It is undeniable that investment analysts, credit institutions and other specialized users increasingly request accounting information in greater quantity and more frequently for their decision-making processes. This is due to the globalization of markets and new technologies and new concepts and operations have emerged, such as financial derivatives, stock options or intangibles, which fall outside the categories established by traditional accounting systems. In addition, the proliferation of investment funds and the remuneration of workers through the delivery of shares contribute to the general public having a growing interest in learning about the profitability of companies that issue negotiable instruments on the stock exchange.
The consequence of all this is that we can speak of an emerging awareness that accounting is a social good, whose impact on the community is much greater than that suggested by traditional financial analysis. Accounting is not only a way of representing relationships of economic and social interdependence, but also serves to adjudicate those relationships. As Tinker (1985) expressed »… each of us means costs and income for the others; each one is a potential benefactor and a potential victim in the accounting nexus of social decision ».
We said that more accounting information is required today, but are claimants trained to properly process all of this increasingly bulky and complex data stream? We are inclined to think no, for the reasons stated below. First, the increasing volume of data faced by users, the information overload turns accounting data into a formless mass of trees in which it is not possible to clearly see the contours of the complex forest that is the situation and perspectives of the company. Second, the increasing complexity of accounting standards is turning financial statements into arcane jargon that is intelligible only to accountants themselves. If this trend continues,To this is added the pernicious effect of the accounting scandals that in recent times have been shaking the economic world, we run the risk that accounting and auditing will no longer be perceived as socially useful and highly professional activities, with the risk that the function of supplying information for decision-making will be usurped by adjacent disciplines.
Accounting is in crisis, more properly, the predominant paradigm is in crisis. The crisis implies a fight between alternative paradigms, so in Accounting we have the paradigm of prudence and the paradigm of fair value (the names of these paradigms obey the principles that are most important to them). If these paradigms do not contradict the ultimate foundations of the science or technique in question, there is no need to discard any of them but to proceed to a paradigmatic synthesis that means to join both paradigms on the basis of new, more global foundations. We believe that this happens or should happen with the alternative accounting paradigms mentioned above. Before we write down some ideas about the paradigms in question.
2.1 The paradigm of "prudence"
We call the prudence paradigm that form of accounting for organizations having as a fundamental principle the Prudence principle. In current accounting, it is based on a system of assumptions, doctrines, axioms and conventions encompassed in what are called "principles". Many of these principles have had a slow evolution throughout history and only the latest accounting advances made in recent decades are reflected in the laws. Some principles are: The going concern principle, the prudence principle, the registration principle, the acquisition price principle, the accrual principle, the realization principle, the uniformity principle, the principle of relative importance. But we also have a meta-principle that is: the faithful image that consists in that,In the event of a conflict between mandatory accounting principles, the one that best leads the annual accounts to express the true image of the assets, the financial situation and the results of the company must prevail. However, the principle of prudence will have a preferential character over the others.
The principle of prudence affirms that only the benefits realized at the end of the fiscal year should be accounted for; however, possible losses, even if not true, will be accounted for as soon as they are considered to be possible.
We believe that this way of organizing information has produced all the accounting scandals and frauds that we have referred to above. This paradigm is therefore in a deep crisis and needs to be re-contextualized and / or reformulated by other norms or principles.
2.2 The “fair value” paradigm
We call the fair value paradigm the one that takes into account the fair value principle. Voices arise that question the social utility of accounting. Is it true that it is not fraught with a future? However, answers also appear, some of which are simple to apply, such as the tools provided by new technologies, and others whose implementation is more risky and therefore requires more caution, such as moving to fair value. In this sense, we endorse the opinion of Gonzalo Angulo (2002), President of the Committee of Experts for the Accounting Reform in Spain, when he warns that since accounting is a social phenomenon, any change, even if it is intrinsically positive, runs the risk of being rejected if it means abruptly breaking the customs of companies and professionals.
One of the main changes is the substitution of historical cost for that of fair or market value (fair value), which will make users of financial information have a better perception of the company, for decision-making. The FASB has defined this concept as: "The amount at which an asset (obligation) can be bought (or incurred) or sold (or agreed) in a current transaction between interested parties, rather than in a forced sale or liquidation". This is easy when there is an established market, but it is difficult when there is no adequate market. For the latter, various elements or assumptions must be taken into account to determine the price, using some information techniques such as taking similar assets and liabilities,or use valuation techniques such as the present value of expected cash flow, or fundamental analysis.
2.3 Towards a paradigmatic synthesis: systemism (21st century Holism)
We consider that both the prudence paradigm and the fair value paradigm are ultimately complementary and would enable a paradigmatic synthesis. For a paradigmatic synthesis to occur we can use the systemic or systemism approach. The systemic approach is a way of conceiving things, as well as approaching and formulating problems. It is characterized by conceiving every object as a complex totality or a component of such. Therefore, the adopter of this approach tries to discover the various aspects of an issue, as well as the problems related to it. Thus avoiding unilateral or sectoral visions, and the corresponding simplistic solutions. “The systemic approach admits the need to study the components of a system but is not limited to them.And it recognizes that systems have characteristics that their parts lack, but it aspires to understand those systemic properties, as well as depending on environmental circumstances.
A paradigmatic synthesis is presented as a continuity and as an improvement. The disputed paradigms often assume very radical ontological or methodological positions vis-à-vis the other, but this is an assumption, it does not always reflect the reality of the theoretical or scientific development in question, so when carefully analyzed both positions turn out to be complementary, enriching the theoretical-conceptual understanding. Synthesizing them implies continuity in development. But a paradigmatic synthesis is also an improvement because although it updates the essential elements of the disputed paradigms, it also surpasses them in terms of their capacity for theoretical understanding, it elevates it to a higher level.
Between the paradigm of prudence and the paradigm of fair value there is this possibility, that of paradigmatic synthesis, and we believe that it is feasible based on the systemic approach. Although we must clarify, the systemic approach is necessary but not sufficient. For an authentic paradigmatic synthesis we require new theoretical-conceptual frameworks and new normative frameworks (and they do not exclude existing ones, but rather complement them, perfect them). We have a great task ahead: the substantive reform of the profession according to the information and knowledge era.
3. NEW THEORETICAL-CONCEPTUAL FRAMEWORKS FOR SELF-REGULATION AND THE DEVELOPMENT OF THE ACCOUNTING PROFESSION
In times of crisis, theoretical, conceptual and categorical proposals arise that claim to be an alternative to the crisis. This is also the case in the accounting professional crisis. Alternatives have emerged that consider that the solution is in ethics and from there a viable proposal will emerge, others consider that the crisis is the consequence of an inadequate process of professional marketing and thus until reaching the position that the solution is in theory, in the norm, in the procedures, etc. These alternatives are all necessary to get out of the crisis, but none have the exclusivity. Therefore, we must take them into account.
Faced with the emergence of these new theoretical-conceptual frameworks, we must assume a systematic, holistic position, which enables us to unify all the emerging alternatives in a great proposal for change to emerge from the professional crisis, having them as basic categories of the accounting profession. Of the existing proposals we can classify them into the following categories: scientific attitude as an epistemological category, instrumental rationality as a technical category, trust as a social category and transparency as an ethical category. We deal with all of them now.
3.1 The scientific attitude as an epistemological category of the accounting profession
Mario Bunge tells us about this category: “The universal adoption of a scientific attitude can make us wiser: it would make us more cautious, without a doubt, in receiving information, in admitting beliefs and in formulating forecasts; it would make us more demanding in contrasting our opinions, and more tolerant with those of others; it would make us more willing to inquire freely about new possibilities, and to eliminate established myths that are only myths; it would strengthen our confidence in experience, guided by reason, and our confidence in reason contrasted by experience; it would encourage us to better plan and control action, to select our ends, and to seek rules of conduct consistent with those ends and with available knowledge, rather than dominated by habit and authority;it would give more life to the love of the truth, to the disposition to recognize one's error, to seek perfection and to understand the inevitable imperfection; it would give us an eternally young vision of the world, based on contrasted theories, instead of being it in the tradition, that tenaciously avoids all contrast with the facts; and it would encourage us to hold a realistic vision of human life, a balanced vision, neither optimistic nor pessimistic. "
This means that we must hone our intellectual tools, unearth unspoken assumptions, and criticize confusing concepts; locate, fix, or discard invalid reasoning; examine frames and question old answers; asking disturbing questions. This is a necessary and substantive, fun but thankless task that must be carried out in the interest of clarity, efficacy and a solid (i.e. constructive) skepticism, as well as to protect the honest pursuit of objective truth and its fair use..
For this reason, the scientific attitude category, representing this style of thinking, must be the ultimate foundation of all action, of all regulations, of all recommendations, of all decisions in the accounting profession. For only a theoretical-conceptual framework based on scientific attitude can protect us from inconsistencies, inefficiencies and immoralities.
3.2 Instrumental rationality as a technical category of the accounting profession
Rationality is the exercise of reason. Rationality is a category that allows us to identify how men recognize and carry out their ends. It allows the precise identification of the means and ends. In other words, the faculty of reasoning is proper to all human beings. However, all human beings and their tasks do not have the same degree of rationality.
Authors such as León Olivé and Nicholas Rescher, identify rationality as: a methodological mechanism that human beings apply when making decisions or making choices; In other words, rationality has among its functions that of providing an instrument that allows them to evaluate certain concepts, theories or present facts. That is why rationality allows the "evaluation" and the "reflection" on the individual and group behaviors of a society; as well as on the choice of reasons and arguments for the construction of knowledge, making decisions and guiding actions.
We have several types of rationality: cognitive rationality, practical rationality, rationality according to values, traditional rationality and rationality according to ends or instruments. Of all the previous ones, the most important for the construction of a new theoretical-conceptual framework in accounting is the last one: Rationality according to ends or instruments. Under the instrumental rationality, the rational is the useful, so it is worth asking: useful for whom or for what? The concern of instrumental rationality occurs in terms of the choice of suitable means and not in the choice of ends. In this sense, objects are seen taking into account their function, related to the achievement of a specific end and not as an end in itself, that is, things are mediated according to the established ends,This is how attempts are made to control behavior and actions based on a purpose established as productive, where the means are calculated and defined by a cost-benefit ratio that determines the efficiency and effectiveness of the means. According to Weber, those who act rationally according to ends must guide their action towards the end, and choose the means, bearing in mind the consequences derived from it and, for which the means must be weighed against the ends, the ends with the consequences involved and the different possible ends between them.he who acts rationally according to ends must orient his action towards the end, and choose the means, bearing in mind the consequences derived from it and, for which the means must be rationally weighed against the ends, the ends with the consequences implied and the different possible ends to each other.he who acts rationally according to ends must orient his action towards the end, and choose the means, bearing in mind the consequences derived from it and, for which the means must be rationally weighed against the ends, the ends with the consequences implied and the different possible ends to each other.
If instrumental rationality allows the determination of the cost-benefit ratio of the means with respect to the ends, then all techniques such as sets of norms and rules have this logic. Accountants use standards to fulfill their functions, therefore, establish the relationship of means and ends. This is the reason to consider that instrumental rationality is a technical category of the new theoretical-conceptual frameworks of the accounting profession.
3.3 Trust as a social category of the accounting profession
On trust as a social category it has been studied quite successfully, by Rafael Franco in his well-known Requiem for Trust. What we summarize very closely below. "Trust," Franco tells us, "is a state of security in the individual, which allows him to integrate with others because there is hope, on the way to certainty, in his loyalty and integrity. Its study can be approached from an axiological level because it is a value or from a social perspective because it constitutes, together with values, networks and attitudes, a determining social capital for development. Confidence grows in conditions of communicational clarity, of certainty and relevance of the information, and clarity is largely determined by the simplicity that makes understanding possible.That is why accounting performs a social function in the creation of trust, by simplifying complexity through the construction of clear representations of complex processes, the contents of which achieve greater credibility, the effect of trust, by professional opinions on the certainty of their content by reducing risks. Trust and risk have an antinomic relationship. Furthermore, trust is the central element of voluntary association, only when you believe in the other is there the possibility of uniting in search of a common achievement based on the joint provision of resources. Trust develops spontaneous association, allows the formation of capital among strangers who trust a manager, depersonalizes business capital and by this means eternalizes organizations. Anyway,trust comes from high values and solid training ”.
Therefore, only through trust as a social category of the new conceptual theoretical framework can new relationships be established with users and the community in general in which there is a level of reciprocal valuation. Trust as a category allows us to study the social implications of professional accounting work.
3.4 Transparency as an ethical category of the accounting profession
Transparency as an ethical category means that everything we do and everything we say follows the rules and our functions. When we carry out our work we are respectful of the regulations that empower us and we can account for everything without fear of being judged for incompetence or disloyalty, that is, we are authentic. When we inform, we strive to tell the truth based on the corresponding regulations. This way of proceeding should be part of our professional work and based on this we will have integrated a scientific attitude, instrumental rationality, and trust in a global and multidimensional ethic. Thus,We need a commitment to high principles and self-discipline in its practice to be able to resist the tendency to exclusively serve our personal interests and to direct our actions, with intentions for the common good. The ability to actively care about the well-being and tranquility of others is a substantive part of transparency. If we are consciously engaged in the process of developing our ability to be transparent we will automatically become a source of inspiration to others. In this way, through our own process of personal transformation, as we interact with society, we influence the transformation of those around us. The transparency category is irreplaceable, but it complements,It creates unity with the other categories in these times of proposals and will help us to design a holistic strategy to restore normality in our professional accounting development.
4. HOLISTIC STRATEGY FOR THE RECOVERY OF CONFIDENCE IN THE ACCOUNTING PROFESSION - TOWARDS NEW RESEARCH PROGRAMS
In the face of accounting irregularities, a substantive reform in theory, in regulations and in accounting practice. A multidimensional reform, our analyzes prove it and demand it; holistic and systemic reform. For this, we need strategies that must complement each other and all of them should deserve equal attention. Such strategies are: cognitive and metacognitive strategies, academic-professional strategies, social and legal strategies, and ethical-axiological strategies.
4.1 Cognitive and metacognitive strategies
Cognitive and metacognitive strategies allow the change or restructuring of our professional mental schemes. We need this change to reform our theoretical-conceptual frameworks and our regulatory frameworks to adapt to the technical and ethical requirements that users and society demand of the accounting profession. Here is our strategy: Let's start with the relentless search for truth, the need for a deductive causal explanation or an inductive generalization, falsifiability, criticism and rational discussion of ideas and theories, the public nature and objectivity of our science. and our practice. And it is precisely this attitude that leads to keep the ideas open to possible rectifications. It is an attitude that, based on theoretical and moral reasons,it involves a whole series of ethical assumptions. This is reasonableness, that of giving importance to rational discussion in which to maintain an open mind regarding any type of objections and qualifications, since it puts us in a position to abandon opinions that we appreciate when there are reasons to abandon them, for example.. And this leads us to what could be called "quality of truth". Indeed, the search for truths resistant to refutation, because we are open to it, increases the quality of the truths obtained with genuine empirical content. We can synthesize this into four concepts-values: truth, the search for truth, the approach to truth through the critical elimination of error and clarity.The purpose of this strategy is to change our conceptual and theoretical references if this is not done, the other strategies are insufficient or mere statements.
4.2 Academic-professional strategies
There are many proposals to reduce accounting irregularities for the academic-professional dimension. From them we extract what we believe to be the most significant and we have the following:
- The range of choice of accounting methods can be narrowed by decreasing the permitted accounting principles or specifying circumstances under which each will apply. Demanding consistency in their use also helps since a company that chooses a method for achieving the desired image this year will have to use the same method in future circumstances where the result may be less favorable or perhaps the least desired. Abuse of the possibility for managers to use their opinions can be controlled by designing rules that minimize the use of opinions. Artificial transactions can be treated by invoking the concept that the substance is above the form, where the economic substance and not the form of transactions, which determines their accounting.Therefore linked transactions will be accounted for as a set.
In addition to the previous one, there is another proposal, which seems perfectly viable to us, Raised PwC that presents a 10-step "Anti-Fraud Action Plan", with which we share as parts of this micro-strategy and which are fundamental for the recovery of professional confidence. and putting them into practice is the responsibility of all professional accountants and unions.
4.3 Social and legal strategies
Social strategies refer to how accountants develop our work in conjunction with our peers, with users and the community in general. For this, we must develop the following capacities: to contribute to the establishment of justice, to contribute to relationships based on reciprocal interconnection and service, to commit ourselves to promoting activities of orientation and service to the community, to formulate a vision of a future based on shared values and principles, of serving in the institutions of society in a way that helps its members to develop and use their talents and capacities in service to humanity, to perceive and interpret the meaning of social events and processes of actuality in light of an adequate historical perspective.
Thus, social strategies should be complemented with legal strategies that consist mainly of supporting all kinds of legal initiatives in all countries or international forums that seek to reduce corruption, fraud, immorality, incompetence and everything that damages the image of the accounting profession. This type of act and strategy shows the community and users a desire for legality and seriousness in the work of the profession and, therefore, the relevance of the service is recovered from the social point of view. But we must not only support legal initiatives, we must promote them as a professional community based on our own research.
4.4 Ethical-axiological strategies
The social reaction to recent financial scandals has extended the adoption of self-regulation, which is put into practice through the implantation of ethical codes of conduct in different organizations and associations of accounting professionals, and has put ethics in fashion. However, in a society based more and more on information and knowledge, this does not seem to be a passing fad. Today, the belief that ethical behavior and efficient performance are the two inseparable components of professional excellence is increasingly shared.
Our ethical-axiological strategy is simple. We promote measuring high ethical and axiological behaviors through a model. Here we state it theoretically since the technical details are not the object of the present. The fundamental idea is the following: the long-term results of the company (RE) -which is the dependent variable of the model and that we could measure using the ROI- is a function of the ethical business behaviors (CEE) -independent variable. In short, the equation would be the following: RE = f (CEE). This multidimensional construct could be measured through the following variables: Corporate Social Responsibility (CSR), Codes of Conduct (CC), Ethics Committees (CE), Ombudsman (O), Ethical Climate (CLE) and Business Culture (C). So,The company's long-term results will be influenced by the following variables: RE = f (RSE, CC, CE, O, CLE, C). This is functional because ethical business behaviors depend on the company's social responsibility, as this is a manifestation of them, on the implementation of codes of conduct, on the existence of ethics committees, on the existence in the organization of the company. figure of the ombudsman, the ethical climate and the values of managers and employees that make up the business culture. This information could be obtained through questionnaires.the implementation of codes of conduct, the existence of ethics committees, the existence in the organization of the figure of the ombudsman, the ethical climate and the values of managers and employees that make up the business culture. This information could be obtained through questionnaires.the implementation of codes of conduct, the existence of ethics committees, the existence in the organization of the figure of the ombudsman, the ethical climate and the values of managers and employees that make up the business culture. This information could be obtained through questionnaires.
With the previous strategy, no one could doubt that we are indeed seeking excellence in our conduct, in our ethics and in our values. It is an exciting challenge because it allows us new and better scenarios.
DISCUSSION GUIDE
- Why is the consideration of the cognitive dimension necessary and fundamental in the analysis of the accounting professional crisis? What are the essential mechanisms of accounting irregularities? How does the accounting professional crisis manifest itself in the academic, social and ethical aspects? And what are its causes? What aspects or spheres does the cognitive dimension of the accounting professional crisis comprise? And what interrelationships are established between these spheres? What are the peculiarities of the crisis of accounting paradigms? Is the confrontation of paradigms due to internal anomalies or social demands?Is a paradigmatic synthesis possible in accounting? Will the emergence of new theoretical-conceptual frameworks allow a substantive change in the processes of self-regulation and in the development of the accounting profession? And what role do the categories of scientific attitude, instrumental rationality, trust and transparency play in the new theoretical-conceptual frameworks? What cognitive and meta-cognitive, academic-professional, social and legal and ethical-axiological strategies should be designed and run to restore confidence in the accounting profession? And can a holistic strategy enable the accounting profession to successfully face the new demands of society in general, and users in particular?Trust and transparency in the new theoretical-conceptual frameworks? What cognitive and meta-cognitive, academic-professional, social and legal and ethical-axiological strategies should be designed and executed to restore confidence in the accounting profession? And can a holistic strategy enable the accounting profession to successfully face the new demands of society in general, and users in particular?Trust and transparency in the new theoretical-conceptual frameworks? What cognitive and meta-cognitive, academic-professional, social and legal and ethical-axiological strategies should be designed and executed to restore confidence in the accounting profession? And can a holistic strategy enable the accounting profession to successfully face the new demands of society in general, and users in particular?and users in particular?and users in particular?
CONCLUSIONS
- Accounting irregularities have been caused by gaps and ambiguities in current accounting regulations and by unethical and immoral behavior by many accounting officers and professionals. One of the ways to commit accounting irregularities is the misnamed creative accounting. In this work we call it "pseudo accounting". The accounting irregularities have produced a deep accounting professional crisis, which in the end have made possible the crisis of the current "prudential" paradigm in accounting and the emergence of new proposals, among them, the paradigm of "Fair value". The most viable alternative is the paradigmatic synthesis and not the assumption of any of the conflicting paradigms.For this synthesis, the most significant contributions of the previous paradigms and of contemporary research on the matter will be used. Among its initial categories, for its theoretical and normative construction are the following: scientific attitude as an epistemological category, instrumental rationality as a technical category, trust as a social category and transparency as an ethical category. For the recovery of confidence in the profession accounting and allow its development and corresponding qualification it is necessary to execute a holistic macro strategy that seeks a substantive reform in theory, in regulations, in instrumentation and in accounting practice. A multidimensional reform, that is; holistic and systemic reform. For this we need micro-strategies that must be complemented.Such microstrategies are: cognitive and metacognitive strategies, academic-professional strategies, social and legal strategies, and ethical-axiological strategies.
BIBLIOGRAPHY
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QUOTES
- The category of accounting irregularities is of technical use, while that of financial scandals is a political category and that of accounting fraud is a term that is linked to the legal one. The concept of professional accounting crisis should refer mainly to fundamental crises, to the pertinence and the ability or not to solve it with the means available to you now. How do financial scandals originate? Domènec Melé Ordinary Professor of Business Ethics IESE Business School Barcelona-Madrid University of Navarra. Some of the interesting works in this regard include “The role of accounting in the face of corporate social responsibility”. Author: Mª Isabel de Lara Bueno. Corporate practices to minimize fraud by CPA Jim Wesberry ATLATL Project Director.Reflections on Latin American economic development from the ethical component, corporate social responsibility and finance Ramón Casilda Béjar. This synthesis shows how irregularities are part of a problematic professional practice. Corporate Practices to Minimize Fraud by CPA Jim Wesberry ATLATLE Project Manager This is a short summary of the work. How do financial scandals originate? Domènec Melé Ordinary Professor of Business Ethics IESE Business School Barcelona-Madrid University of Navarra. Our author's approaches are synthesized in various works, let us note some of them: Melé, D. (1991): "Ethics and business". Spanish Commercial Information, March, n.691, pp. 122-134. (1997). "Accuracy in business communications,"Technical Note from the IESE Research Division, nº TDN-90, 11 p. (2001a). "Basic principles of a code of good conduct", La Vanguardia-Supplement Economy and Business, January 27, p. 5. (2001b). "Ethical aspects of the securities markets", in JL SÁNCHEZ FERNÁNDEZ DE VALDERRAMA (ed.), Course on Stock Exchange and financial markets, 3rd edition, Barcelona: Ed. Ariel, pp. 485-512. (1998). Ethics in financial activity, Pamplona: Ed. Eunsa, 255 p. (2000). «Business ethics policies in the 500 largest Spanish companies, IESE Working Paper Nº 00 / 4.Cf. How do financial scandals originate? Domènec Melé Ordinary Professor of Business Ethics IESE Business School Barcelona-Madrid University of Navarra.Cf.How do financial scandals originate? Domènec Melé Ordinary Professor of Business Ethics IESE Business School Barcelona-Madrid University of Navarra.Ibidem.Ibidem.Cf. Corporate governance responsibility in the parmalat case * Miguel A. Cano ** René M. Castro; Accounting manipulation and corporate fraud Miguel Cano CPT. Rene M Castro CPT. Rodrigo Estupiñán CPT.; Corporate practices to minimize fraud by CPA Jim Wesberry ATLATL Project Director. Winstanley, D; Clark, J; Leeson, H. (2002). "Approaches to Child Labor in the Supply Chain". Business Ethics: A European Review. Oxford.Ibidem.Ibidem.Op. Cit.Cf. Ethical considerations in financial advice Jordi Melé-Carné Full Professor of the Department of Economic Theory (University of Barcelona) Academic collaborator of the Institut d'Estudis FinancersCf. Schuetze, WP(1993): "What is an asset?", Accounting Horizons, September.; Putnam, RD (1995): "Bowling alone: America's declining social capital", Journal of Democracy, vol. 6, pp. 65-78Compare the proposals of Stigliz Joseph, The happy 90s The Seed of Destruction, Editorial Taurus 2003.Cf. Financial Information Problems, are IAS the Solution? Oriol Amat - Professor at the Pompeu Fabra University.Cf. The Social Acceptance of the Accounting Creativity of the Benefit. The Example of Realization of Capital Gains José Ignacio Martínez - Professor at the University of the Basque Country. Op. Cit.Cf. Sáiz Álvarez, JM (2004a): “A Proposal for a Theoretical Outsourcing Dynamic and DC Learning Curves Model. Some Considerations for EU and non-EU countries ”, I International Conference on European Union-Latin America, Universidad Antonio de Nebrija,La Berzosa Campus, January 13, CDRom, pp. 18. Sakaiya, T. 1995. History of the future. The knowledge society. Editorial Andrés Bello. Chile.Cf. Porter, ME; Kramer, MR (2003). "Business Philanthropy as a Competitive Advantage". Harvard Deusto Business Review. O'Sullivan, M. (2000b): Contests for corporate control: corporate governance and economic performance in the United States and Germany, Oxford University Press, Oxford. Melé, D. (1991): «Ethics and business». Spanish Commercial Information, March, n.691, pp. 122-134.This concept is a mixture of the theoretical framework and the conceptual framework. These concepts are recensions of Mario Bunge's thought developed in his Treaties. Financial Information Problems, are IAS the Solution? Oriol Amat - Professor at the Pompeu Fabra University..Ibidem.Cf.Reform Colombian accounting? Article contributed by: Luis Eduardo Olaya Arboleda Public Accountant - Javeriana University, Specialist in Corporate Finance - CESATinker, AM (1985): Paper prophets: a social critique of Accounting, Praeger, New York, USA.Cf. Sichar, G; García-Marzá, D; González, E; Ballesteros, C; Navarro, F. (2003). The Socially Responsible Company, Ethics and Company. Cideal. Madrid.Cf. The change in organizational paradigms: adapting the company to mega-trends By: Lic. Eugenio RamírezCf. The change in organizational paradigms: adapting the company to mega-trends By: Lic. Eugenio Ramírez.Cf. Corporate social responsibility: theoretical review. Rosa María Vaca Acosta Dr.Alfonso Vargas Sánchez Elena García de Soto Camacho Faculty of Business Sciences Department of Business Management and Marketing University of Huelva.Cf. The social responsibility of the company: some economic foundations José Miguel Rodríguez Fernández Department of Financial Economics and Accounting University of Valladolid. The paradigmatic synthesis is an epistemological reality thanks to the emergence of purely interdisciplinary and multidimensional sciences such as soci-natural sciences and sociotechnologies. BUNGE, Mario Search philosophy in the social sciences, xxi century editors, Mexico DFIbidem.BUNGE, Mario Social systems and philosophy, Buenos Aires, Edit. Sudamericana.OLIVÉ, León (ed.) Epistemic rationality, Madrid, Edit. Trotta SAIbidem.BUNGE, Mario Social systems and philosophy, Buenos Aires,Edit. South American. Social sciences in discussion, a philosophical perspective, Buenos Aires, Edit. South American. Theory and Reality, Barcelona, Ariel.Rafael Franco has made significant contributions to the study of trust, so we consider that the vision he has on the subject is definitive and supports this category from multiple points of view. Franco Ruiz Rafael, Requiem for Trust, Investigate editors, Pereira, 2002. You can also consult his Accounting Reflections, Education and Moral Theory, second edition, Investigate Editors, Pereira 1999.Ibidem. Transparency is related to truth and authenticity that is why it is an ethical category. When we say multidimensional reform we are calling attention to the methodology that should be applied in any reform is the systemic method or approach.Read more on the matter in BALZER, Wolfgang Empirical Theories: Models, Structures, and Examples. The fundamental elements of the contemporary theory of science, Madrid, Alianza Editorial.Cf. The Internal Auditor: Soldier in the War on Corruption By Jim Wesberry, Project Director Yes You Can! - EcuadorThis institution seeks with its proposal a frontal and worldwide fight against fraud. That is why we consider their contribution to be important and we accept their proposal. Hirigoyen, G. and Pichard -Stamford, JP (1998): "La confiance, an outil de la finance organizationislle: une synthése de la littérature récente", Économies et Sociétés (Sciences de Gestion), vol. 32, pp. 219-234.Cf. Jones, A. (2001): "Social Responsibility and the Utilities".Journal of Business Ethics, December, vol. 34, 3 -4, pp. 219-229.Cf. Corporate Social Responsibility is an alternative to improve the living standards of a society and its limitations. Marbella Araceli Gómez Lemus Full Professor Universidad Juárez Autónoma de Tabasco. Mexico Student of the Doctorate in Business Administration and Management at the UPC under the direction of the Full Professor. José María Armengou Marsans. This formula can even be axiomatized and become one of the first laws in the field of intangibles. The preparation of questionnaires for the effective application of this strategy must be part of a research program or a section of she.Corporate Social Responsibility is an alternative to improve the living standards of a society and its limitations. Marbella Araceli Gómez Lemus Full Professor Universidad Juárez Autónoma de Tabasco. Mexico Student of the Doctorate in Business Administration and Management at the UPC under the direction of the Full Professor. José María Armengou Marsans. This formula can even be axiomatized and become one of the first laws in the field of intangibles. The preparation of questionnaires for the effective application of this strategy must be part of a research program or a section of she.Corporate Social Responsibility is an alternative to improve the living standards of a society and its limitations. Marbella Araceli Gómez Lemus Full Professor Universidad Juárez Autónoma de Tabasco. Mexico Student of the Doctorate in Business Administration and Management at the UPC under the direction of the Full Professor. José María Armengou Marsans. This formula can even be axiomatized and become one of the first laws in the field of intangibles. The preparation of questionnaires for the effective application of this strategy must be part of a research program or a section of she.José María Armengou Marsans. This formula can even be axiomatized and become one of the first laws in the field of intangibles. The preparation of questionnaires for the effective application of this strategy must be part of a research program or a section of she.José María Armengou Marsans. This formula can even be axiomatized and become one of the first laws in the field of intangibles. The preparation of questionnaires for the effective application of this strategy must be part of a research program or a section of she.
APPENDIX: MAIN ACCOUNTING IRREGULARITIES STUDIED
|
BUSINESS |
EXERCISE |
PERIOD |
ACCOUNTING FACT |
INFRINGEMENT |
| MERCK | Pharmaceutical and chemical products | 1999-2002 | Record $ 14.06 billion of revenue from billing your drug insurance affiliate that was never raised by the subsidiary | IAS 18- Revenue Recognition IAS 1- Presentation of financial statements |
| ADELPHIA COMUNI-CATIONS CORPORATION | Cable TV | 2002 | Hide $ 2.3 billion in debt to shareholders. | IAS 1- Presentation of financial statements |
| BBVA BANCO CONTINENTAL | Finance company | 1999-2002 | Reveal the existence of funds as a term deposit for BBVA personnel in the Jersey Islands not recognized as income of the bank for Pta 3,489 million
. |
IAS 18- Revenue Recognition |
| PARMALAT | Foods | 1990-2003 | Manipulating information for 4,900 million dollars of
non-existent assets balanced with the same sum of resources obtained with bank credits, obligations and own funds |
IAS 1- Presentation of financial statements |
| WORLDCOM | Telecommunication | 2001 and 1st quarter 2002 | Register as capital investments $ 3.8 billion (Internet communications project,
long distance telephony, network access. |
IAS 1- Presentation of financial statements IAS 8- Profit or loss for the year, substantial errors and changes in accounting policies. |
| TYCO INTERNA-CIONAL | Security systems, electronic connections and others | 2002 | Theft and fraud of $ 400 million in securities and money obtained for services not provided | IAS 1- Presentation of financial statements IAS 25- Accounting for investments |
| ENRON | Energy, gas and water | 2002 | Record fictitious income of more than 600 million dollars. | IAS 1- Presentation of financial statements IAS 18- Revenue Recognition |
