The recent release of the Statement of Accounting Standards No. 112 regulation made it necessary to communicate the standard and its impacts to the accountants within the firm. It was also imperative to make our key clients aware of the regulation and how it might affect their business. Finally, to ensure seamless compliance with the regulation, we are educating our clients’ bookkeepers of the regulation and its ramifications on their duties. When accounting standards are updated, the changes often must be communicated to several different audiences, as demonstrated by this change. Communicating this information to different audiences presents several challenges that need to be carefully navigated.
One challenge that exists when communicating to different audiences is that they have a need of different levels of information. In the example here, our client’s senior leaders need to possess a high level understanding of the change so that ...view middle of the document...
For example, our firm’s accountants will be familiar with the acronyms SAS (Statement of Accounting Standards), ASB (Accounting Standards Board), and AICPA (American Institute of Certified Public Accountants). Accountants will also understand what Statements of Accounting Standards are, how they are created, and for what purpose they are designed (specifically that “Statements on Auditing Standards (SASs) are issued by the Auditing Standards Board (ASB), the senior technical body of the AICPA designated to issue pronouncements on auditing matters applicable to the preparation and issuance of audit reports for nonissuers” ). Conversely, our clients will likely hold little, if any, knowledge of accounting practices. Using acronyms and referencing accounting terms can lead to confusion. To address this dynamic, it becomes necessary to tailor the dissemination of information differently for each group according to their level of knowledge.
Communicating changes effectively is extremely important and failure to do so can result in several problems. First of all, communicating the standards poorly can lead to a misunderstanding of the changes. For example, our clients may not understand the importance of a change or how it impacts them. This misunderstanding could lead to an inaccurate recording of financial information and subsequently to errors in their financial statements. Similarly, poorly communicating changes of the standards to our accountants could lead to improper or incomplete auditing procedures. Failure to communicate changes in a timely manner may also lead to difficulties in executing the new standards. For example, delays in communicating changes could lead to insufficient time for our accountants and bookkeepers to train on new auditing procedures necessitated by the new standards.
The issuance of new accounting standards requires the effective communication of the changes to multiple audiences. The diverse nature of the audiences can create challenges when disseminating information. Problems can arise due to poor communication that may impact either our clients or our firm. It is important to consider these challenges in order to manage effectively through the changes associated with new accounting standards.