Financial and accounting changes on the way

Recently, the government announced changes that will have a significant impact on the accounting and audit industry, allowing it to be more effective.

Commerce and Consumer Affairs Minister Paul Goldsmith came forth about the changes at the end of May, explaining that these complete a suite of reforms designed to make the sector more competitive and efficient. What's more, the changes will ensure New Zealand businesses are able to receive quality independent advice.

"This is a further step to simplify our legislation, make it more relevant and ensure people continue to have confidence in their finance professionals," Mr Goldsmith said.

This new statutory financial reporting framework was established as part of reforms designed to promote confidence in local financial markets. Scoop explained that the new statutory financial reporting framework replaces the older Financial Reporting Act 1993.

What impact will this have on companies? The aim is to reduce compliance costs for small and medium-sized businesses, by removing the obligation to prepare general-purpose financial reports.

"Under the new legislation, around 95 per cent of companies in New Zealand will no longer have to prepare financial statements that comply with New Zealand accounting standards," Scoop noted.

The new accounting standards framework, on the other hand, will "step away" from a single set of accounting standards for all entities. It's expected that the new approach will effectively cater for the investors, tax and rate payers, and creditors.

While these changes will certainly prove useful, businesses may also want to consider accounting software solutions to make the management of accounting far easier. Once implemented, the tool can assist with purchase orders, inventory management and bulk marketing.