There are several factors that lead to the current and extremely dangerous financial and economic crisis, foremost amongst which is the way financial derivatives are dealt with and accounted for under international standards, especially International Accounting Standard No. (39), in addition to other factors that either complemented or were a natural extension of the aforementioned standards such as lack of oversight and poor transparency. The role other factors played in the financial crisis cannot be overlooked, however they were relatively smaller. This crisis might be curbed but the question remains how will it end and what are the consequences? More importantly, will it happen again? Is the pursuit of a stable financial system as announced by the leaders of the European Union during their summit with emerging economies in L’Aquila, Italy on 08/07/2009 a fact? Or simply claims and cosmetic remedies in order to show harmony as is often the case when some standards are modified to counteract the symptoms of a problem but not to actually fix the underlying issue. Continuing a trend that ignores values, commonalities and accepted professional ethics will have a lot of repercussions and lead to collapse; as such the alleged unification of systems will be nothing more than a ploy meant to conceal deliberate policies that use accounting and its standards as a means to further exploit and manipulate the wealth of nations besides complicating accounting practices and its concomitant burden and costs. Working towards the development of appropriate standards and sound accounting practices will result in a balanced, fair international financial system where accounting will then succeed where policy has failed; unfortunately reality points to the supremacy of the former trend where financial derivatives, its standards and accounting reflects the exploitative aspirations of economic policies. After reviewing these factors and analyzing the core issues and its impact on the current financial crisis, the Study reached a number of conclusions that formed a basis upon which appropriate recommendations have been proposed.

Title

Journal of Business Studies Quarterly (JBSQ)

Publisher

Journal of Business Studies Quarterly (JBSQ)

Publisher Country

United States of America

Indexing

Scopus

Impact Factor

None

Publication Type

Both (Printed and Online)

Volume

4

Year

2013

Pages

172-222