Accounting unreliability risks in the context of accounting reform

Abstract

Subject. This article examines the problems of ensuring the reliability of accounting as an accounting system that summarizes all the economic events of the organization's activity and reflects the true data based on documented values of business transactions. Objectives. The article aims to substantiate the fallacy of the modern official accounting formation on the basis of a combination of regulatory and economic accounting concepts, leading to the unreliability of its data for making management decisions. Methods. For the study, we used analysis, systems approach, and logical generalization. Results. The article proposes to recognize there might be unavoidable unreliability in the existing accounting system, identify two accounting options, and distinguish between the areas of application of each of them, making official accounting based on a normative approach. Conclusions and Relevance. Accounting is necessary to provide managers at the organization's various levels with information in order to manage the enterprise. The financial result of the organization's activities is the only reliable indicator reflecting the growth or decrease in invested capital. Its formation should be based on documents fixing economic actions and their cost data. The presented results of the study are intended for the development of theoretical views on accounting paradigms and their application in the formation of practical accounting methods.