Question

There are some regulations that can play a factor in REA models. What are some ways the laws impact how companies handle this type of modeling?

Answer 1

REA model is introduced by  William E. McCarthy in 1982, which concerned with Resources, Events and Agents as a generalized accounting model. This model rely heavily of information technology for book keeping and accounting activities.This model is famous for teaching accounting practice but rarely popular for implementation by business. following regulations have more impact on REA model i.e.  electronic commerce standard ebXML and   XBRL GL because these are mimicking double-entry book keeping.Relational databases with entity-relationship diagrams,the way transactions are recorded and acceptance of the related accounting bodies for such accounting procedures are difficult to handle.