Long before the development of the Internet and its worldwide accessible platforms, applications and software products, accounting has always been a language by itself serving as an international business tool, also known by “the language of business”, which is set to facilitate the communication among various internal and external actors and decision makers.
In this context, Hani Sibai, Head of the Department of Accounting - Faculty of Business Administration, explains that “even though multinational companies can operate in various locations with different national languages, every business entity needs a commonly agreed language to properly function. These financial records must be transferred into an easily accessible format that can be understood by any user in the business world.”
Accounting measures process and communicate the corporation’s financial information, through which individuals and companies exchange valuable business information. “The financial figures resulting from accounting operations help the owners, managers and investors to take the right decisions based on accurate facts and figures. In reality, when the financial statements of a company are easily readable, it becomes easier to evaluate its situation, place an offer and negotiate a counteroffer,” he adds.
The financial reporting should be clearly communicated. To facilitate reading, writing and understanding financial statements, it is important to acquire a set of basics, rules and regulations. Accounting is based on a commonly agreed-upon principles and practices compliant with international standards, usually controlled by local authorities and syndicates.
“Despite the importance of clear accounting guidelines and key principles, it is sadly noticed that many institutions in Lebanon do not respect the norms. The lack of transparency in financial statements could not only affect the companies or businesses, but also the national economy. Investors usually seek stable and transparent markets; therefore, the lack of trust gets away foreign investments, which also have repercussions on the stock market as they usually trigger the creation of Initial Public Offerings (IPOs),” says Sibai.
He concludes by stating that “the Lebanese Association of Certified Public Accountants should take the compulsory measures to control the framework of accounting teams and institutions in order to fix the corruption and reinstate trust in Lebanese financial reporting.”