Accounting reform refers to a set of changes that aim to improve the accuracy and transparency of financial reporting by businesses and other organizations. The goal of accounting reform is to make financial statements more informative and useful, so that investors, creditors, and other users can better understand an organization’s financial health and performance.
There have been several waves of accounting reform over the past few decades, in response to major corporate scandals (such as Enron in 2001), new technologies, and changing economic conditions. Some of the most significant changes have included the adoption of new accounting standards (such as Generally Accepted Accounting Principles in the United States), the establishment of independent auditing boards, and the creation of new disclosure requirements.
Despite these reforms, there are still many challenges in ensuring the accuracy and transparency of financial reporting. For example, businesses may use creative accounting techniques to artificially inflate their profits or hide their debts. Additionally, the accounting standards themselves are constantly evolving, making it difficult for businesses to keep up with the latest changes.