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Essay / Research Paper Abstract
This 7 page paper looks at differential accounting in Canada and the review concerning how standards may be developed for private enterprises in terms of GAAP and considers whether the review and concept of differential accounting, where private small and medium sized business may have a lower accounting burden, discussing whether this is moving towards IFRS or away from it. The bibliography cites 7 sources.
Page Count:
7 pages (~225 words per page)
File: TS14_TEcanacct.rtf
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Unformatted sample text from the term paper:
public enterprises (AcSB, 2007). Over the last few decades there have been debates regarding whether or not it is appropriate to develop separate GAAP for private enterprises, which is
mainly made up of small to medium sized enterprises. Differential accounting, which began in 2002 in Canada, had a broad range of support. The Small Business Enterprises Advisory Committee
(SBEAC) of the Canadian Institute of Chartered Accountants (CICA) supported the adoption of differential accounting for smaller businesses based on cost benefit issues (The Accountant, 2001). The growth of regulations
and need to comply places a burden on business, but the burden, it has been argued, is felt disproportionately. According to the Canadian Federation of Independent Business (CFIB) the burden
of all regulation including compliance with labour laws as well as tax and accounting requirements equates to about $5,300 per employee for firms with five or less employees, where companies
have more than 100 employees this cost drops to about $1,100 per employee (Barcelo, 2007). This differential approach is one which is under review at the current time with the
issue of an invitation to comment (ITC) on the development of separate GAAP for private enterprises (AcSB, 2007). With this cost difference there is a very persuasive argument in
terms of practical costs and implication, especially when the importance of private enterprises within the economy is considered (Edwards, 2007). The complexity is also a drain in terms of
resources, the director of legislative affairs at the CFIB, Simon Prevost, states "If youre a company of five employees and you have to sit down so many more hours with
your accountant, thats 20% of your workforce youve just immobilized" (Barcelo, 2007). The complexity of the way that the regulation have developed is reflected in expansion of the "Guide to
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