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Posted on May 4th, 2014, by

Today, the development of the higher education raises a number of problems in face of students as well as Universities because costs of the higher education and tuition grow fast, while many students often turn out to be unable to enter Universities just because they cannot afford the high tuition and costs of studying at the University. On the other hand, Universities are concerned with the maintenance of well-qualified professionals in their staff and the provision of educational services of the high quality. In such a situation, Universities attempt to offer attractive compensation plans which attract well-qualified professionals and maintain the stable positive organizational performance of Universities. On the other hand, the growing costs of education, the development of diverse compensation plans and other financial issues lead to the growing complexity of the accounting and financial performance of Universities. In this respect, it is possible to refer to the Texas State University which maintains stable performance and attempts to meet GAASB standards in terms of its accounting and financial statements to be transparent and, therefore, attractive to students because, if students know where their money goes, they are more confident in the University, especially if they count on grants and different aid programs as is the case of students studying at the Texas State University.

The employee pension plan disclosures in the financial statements and the impact of GAASB

On analyzing the current policy of the Texas State University concerning its employee compensation plans, especially pension plan, it is important to place emphasis on the fact that the University aims at the retention of the personnel and well-qualified professionals in the University. In actuality, the pension plan offered by the University to its employees aim at the provision of employees with high pension plans on the condition of their loyalty to the University. In fact, employees need to work for a long time to receive higher pension after their retirement. In such a way, employees grow interested in the work in the University to obtain higher pensions. On the contrary, employees, who work at the University in a short-run, cannot count on high pension plans. Nevertheless, the University offers them compensation plans, in case if they lose their job in the University or decide to transfer to another University.

At the same time, it is worth mentioning the fact that the Texas State University attempts to match the GAASB standards. In actuality, the University develops its accounting policy in such a way that “investments are stated at fair value in all funds except pension trust funds in  accordance with GASB Statement 31-Accounting and Financial  Reporting  for Certain Investments and for External Investment Pools.  For pension trust  funds, investments are required to be reported at fair value using the accrual basis  of accounting in accordance with GASB Statement 25 – Financial Reporting  for Defined Benefit Pension Plans and Note Disclosures for Defined  Contribution Plans.”ť  (Annual Financial Report, 2011, 19). Therefore, the policy of the Texas State University in relation to pension plan and compensation plans is transparent, while the financial statement of the University helps auditors to monitor the accounting system of the University effectively.

The economic conditions that will affect the future growth and success of the institution

In the future, the transparency of financial policies of the Texas State University will help the University to maintain its competitive position in the market because students will be interested in transparent University with clear financial policies. In addition, the implementation of GAASB standards will affect all Universities and they will have to match these standards. In actuality, the Texas State University has already started to implement these standards that will facilitate its full transition to GAASB standards.

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