More handpicked essays just for you.
The importance of financial reporting standards
Importance of international financial reporting standards
Consequences of national and international accounting standards on auditing
Don’t take our word for it - see why 10 million students trust us with their essay needs.
The Corporate Law Economic Reform Program No 9 discussion paper, recommended that Australia adopt the International Financial Reporting Standards (IFRS) which commenced 1st January 2005. A key driver for this recommendation was realization that Australia was part of an increasingly global network. It was suggested that adoption of the IFRS would lead to “high quality, internationally accepted accounting standards which will facilitate cross border comparisons by investors”, (CLERP No.9 2003). A benefit of improved comparability of accounting information would be enhanced bilateral capital flows at a lower cost to Australian firms. This prompted much debate and expressed concerns in Australia with the IFRS introduction. Many of the concerns related to “a potential loss of autonomy and legitimacy in standard setting”, (Jones & Wolnizer 2003). They also suggest that “the perception that IFRS are of lower quality than local Australian standards”. The adoption of IFRS changed financial reporting requirements for Australian businesses. New standards were proclaimed to cover previously loosely regulated areas of financial reporting. AASB138/IAS38 Intangible Assets was proclaimed with the adoption of IFRS. Prior to 2005 Intangible Assets were not covered by an overarching standard, but aspects were covered by a number of related accounting standards. AASB 138 caused much consternation for Australian businesses in meeting new criteria. This paper examines the standard for Intangible Assets and explores consequences for research and development (R&D) expenditure. CONCEPTUAL FRAMEWORK Qualitative features of financial information are imperative in making decisions for the firms and corporate. Financial information reveals a firm’s ava... ... middle of paper ... ...view’, http://pc.gov.au/-data/assets/pdf-file/0020/65711/ricasb.pdf Schipper, K 1989, ‘Commentary on Earnings Management’, Accounting Horizons, Vol September, pp. 91-103, retrieved 2nd January 2014, EBSCOHost database. Treasury Department 2002, ‘CLERP No 9 ‘Proposal for Reform – Corporate Disclosure Part 6 Accounting Standards’, http://archive.treasury.gov.au/documents/403/html/docshell.asp Watts, R & Zimmerman, J 1978, ‘Towards a Positive Theory of the Determination of Accounting Standards’, The Accounting Review, Vol LIII, No 1, pp 112-134. Zare, I, Nekounam, J and Gerami, A 2012 , ‘Review Reliability for Value of Intangible Assets in Financial Statements’, Vol. 2, no. 3, pp. 7115 - 7119 , Journal of Basic and Applied Scientific Research < http://www.textroad.com/pdf/JBASR/J.%20Basic.%20Appl.%20Sci.%20Res.,%202%287%297115-7120,%202012.pdf>
DHALIWAL, D. S., GLEASON, C. A., & MILLS, L. F. (2004). Last-Chance Earnings Management: Using the Tax Expense to Meet Analysts' Forecasts. Contemporary Accounting Research, 21(2), 431-459.
The goal of the Codification is to simplify the organization of thousands of authoritative U.S. accounting pronouncements issued by multiple standard-setters. To achieve this goal, the FASB initiated a project to integrate and topically organize all relevant accounting pronouncements issued by the U.S. standard-setters including those of the FASB, the American Institute of Certified Public Accountants (AICPA), and the Emerging Issues Task Force (EITF)
"Accounting Standards Codification: Notice to Constituents (v4.1) About the Codification." FASB: Financial Accounting Standards Board. 30 Apr. 2010. Web. 26 Nov. 2010. .
We would love for these impacts to always have a positive impact; however the impact can affect a company in a negative manner. “ Researchers Holger Daske, Leuz Hail, Christian Leuz and Rodrigo Verdi examined 3,100 firms in 26 countries mandated to adopt IFRS in “Mandatory IFRS Reporting around the World: Early Evidence on the Economic Consequences”. The study examines the economic effects of IFRS, both early and mandated adoption” (Bolt-Lee). They were able to conclude that a company’s adoption of IFRS creates strong economic benefits in countries with rigid regulation over financial reporting. The article also explains that these benefits include an increase in the stock’s market value, an increase in market liquidity, and a lower cost of capital. Companies with major differences between GAAP and IFRS standards show the greatest benefit when supported by a strong regulatory
Marshall, D.H., McManus, W.W. & Viele, D.F. (2011). Accounting: What the numbers mean (10 ed). New York, NY: The McGraw-Hill Companies, Inc.
Olusegun Wallace, R. 1996. The Development of Accounting Research in the UK. In: Cooke, T. and Nobes, C. eds. 1997. The Development of Accounting in an International Context. London: Routledge, pp. 218-254.
Marshall, M.H., McManus, W.W., Viele, V.F. (2003). Accounting: What the Numbers Mean. 6th ed. New York: McGraw-Hill Companies.
The New Zealand (NZ) Framework for Financial Reporting is in the process of changing since 2009, as a result of the review of the statutory reporting requirements in New Zealand by Ministry of Economic Development (MED) and the Accounting Standard Review Board (ASRB). The mainly recommendation was to remove small and medium sized companies from the statutory reporting framework (Ernst & Young, 2013, p.11). This New Zealand Framework for Financial Reporting 2010 (NZ Framework) was issued by the New Zealand Accounting Standards Board of the External Reporting Board (XRB) in 2011. The changes of framework pull open the NZ financial reporting standards that comprise NZ Generally Accepted Accounting Practice (GAAP) setting movement from ‘rule-based’ approach to ‘principle-based’ approach. Then comes to the question: Whether the application of NZ GAAP is supported positively by the NZ Framework with the appropriate underlying principles, or it preserved a largely ‘rule-driven’ approach? From my perspective, NZ Framework provides parts of applicable underlying principles in guidance of NZ GAAP but there are rooms for improvement.
Hopper, T.M., Ashton, D., & Scapens, R.W. (1995). Issues in Management Accounting (2nd ed.). Edited by D. Ashton, T. Hopper & R. Scapens. , UK: Prentice Hall.
Lange, Fornaro, and Buttermilch (2015) focused their research on the FASB Accounting Standards Update (ASU) 2011-08, in regards to Intangibles – Goodwill and Other: Testing Goodwill for Impairment. The authors elaborated on how reporting has been done in the past and how the changes made for private companies has helped ease the financial reporting of goodwill. In addition, the authors discussed the definition of a public business entity. This helps to allow private companies to determine the proper way to report their financial
According to the conceptual framework, the potential users of financial statements are investors, creditors, suppliers, employees, customers, governments and agencies, and the general public (Financial Accounting Standards Board, 2006). The primary users are investors, creditors, and those who advise them. It goes on to define the criteria that make up each potential user, as well as, the limitations of financial reporting. The FASB explicitly states that financial reporting is “but one source of information needed by those who make investment, credit, and similar resource allocation decisions. Users also need to consider pertinent information from other sources, and be aware of the characteristics and limitations of the information in them” (Financial Accounting Standards Board, 2006). With this in mind, it is still particularly difficult to determine whom the financials should be catered towards and what level of prudence is necessary for quality judgment.
AASB, Australian Accounting Standards Board, Statement of Accounting Concepts SAC4 ‘Definition and recognition of the elements of financial stat
Schroeder, Richard G., Myrtle Clark, and Jack M. Cathey. Financial Accounting Theory and Analysis: Text and Cases. 10th ed. Hoboken, NJ: John Wiley & Sons, 2009. 97. Print.
Marshall, D. H., McManus, W. W, & Viele, D. (2002). Accounting: What the Numbers Mean. 5th ed. San Francisco: Irwin/McGraw-Hill.
Marshall, D., McManus, W., & Viele, D. (2004). Accounting: What the numbers mean. [University of Phoenix Custom Edition e-text]. New York, NY: McGraw-Hill Companies.