Most under developed countries lack lots of sources that many industrialized countries, like the U . s . States, possess. One of the numerous things they lack will be the understanding and exercise of efficient accounting standards and systems. These countries are the ones which have a number of other issues in keeping such low national earnings per person, low living standards and amounts of unemployment. Today, under developed countries are damaged lower into different groups: “Recently Industrialized Countries” (NICs), “More Civilized World” (MDCs) and “Least Civilized World” (LDCs). NICs describe countries which are approximately an industrialized country along with a under developed country. Countries within this category are usually characterised by rapid economic growth driven by exports along with a migration of workers from rural to cities. They share many similar traits of underdeveloped countries, but appear to become moving more toward civilized world. MDCs could be countries which are above LDCs, but below NICs when it comes to gross national earnings per person, economic growth along with other measures. LDCs make reference to countries which are really missing in most areas which help to construct economic growth. These countries take into account under 2% around the globe GDP and 1% of worldwide exchange goods (United nations-OHRLLS). As formerly mentioned, countries in all these 3 groups possess a lot in keeping that classify them like a certain kind of under developed country.
When it comes to accounting, these countries face lots of similar issues for example poor internal control, lack of management accounting, incomplete/inaccurate records and much more. One printed work breaks lower these problems of accounting in developing countries into 4 components: Enterprise, Government, Education and Profession. The enterprise component describes accounting issues for independently owned companies in developing countries. This revolves mainly around the possible lack of qualified staff to do accounting tasks for example auditing and bookkeeping. This problem adds on the possible lack of cost accounting skills required to correctly prepare fiscal reports and annual reports, that leads these businesses to look for outdoors accounting assistance. The federal government component ties from our and national governments of developing countries as well as their weaknesses in accounting. Their problems originate from using obsolete accounting methods, like the cash-method. Just like the issues with independently owned firms, the governments show too little qualified staff to do obligations for that country. This can result in poor internal control systems, inefficient management and can eventually affect move when the country’s financial records aren’t correctly prepared. Poor records may also attribute to irregular information with regards to the country’s economic standing. The training component explains the possible lack of sources to correctly educate students in developing countries who’re going after an accounting degree. These sources include textbooks, curriculum content and, once more, insufficient qualified staff to educate the scholars. The final component handles the general accounting profession in under developed countries. Many of these countries don’t have an expert body or standards to do things. Without correct guidelines and practicing the accounting profession, citizens during these countries employed in the accounting field won’t be suited to any accounting positions. As the second result, this plays a role in our prime insufficient qualified staff to educate accounting students and perform efficient accounting responsibilities for public and private firms. (Springer)
Some methods to these accounting challenges could be based on first searching in the good reputation for accounting in developing countries. Many of these countries have used accounting techniques that are obsolete. Furthermore, we all know in the 4 components described above the primary reasons for poor accounting practices in developing countries are the possible lack of qualified accountants and improper internal controls, but another primary cause would the possible lack of importance placed on this problem compared to other conditions the nation might be coping with. To find methods to their issues with proper accounting standards, the developing countries must first place a greater degree of importance on solving these problems. Once that may these countries be prepared to find the aid of accounting professionals from civilized world. These professionals might have the abilities and understanding needed to correctly educate under developed citizens who’re going after an accounting degree. Taking these first 2 steps will open more possibilities for schools and enterprises in developing countries to grow their programs for accounting and finance using more contemporary and helpful accounting standards and methods.