Financial Reporting in an Accounting Environmnent

Introduction/Overview of the first three weeks of the Module

Week 1 provide background for the financial reporting module and refreshes basic accounting concept in Finance and accounting for manager module. It provides detailed differences between cash flow and accrual accounting and a critical analysis of preferred methods as well as examines the standard setting processes and challenges. Week 2 is a follow up to week1 as it dwells extensively on economist approach to income and asset valuation, accounting for price-level changes and income recognition models. It looks at computation of profit from both accounting and economics view and the relationship between the two.

Week 3 was a follow up on weeks 1 and 2 studies; it examines both traditional and modern way of interpreting financial statements and assessing the financial health of an organization. It also introduces the challenges and benefits of financial reporting on the internet.

These 3 weeks studies put together has captured important areas of financial reporting that are of practical use in modern accounting environment. This paper therefore ride on these to examine the article by Larson & Street (2004) on the progress and impediment identified by top accounting firms’ survey during International Financial Reporting standard( IFRS) convergence process in an expanding Europe.

Overview of (Larson & Street, 2004) article

In 2002, European Union (EU) requires all members’s listed companies to adopt and prepare consolidated accounts using International Financial accounting standard (IFRS) effective 2005. This is a big event for International Accounting Standard Board (IASB) which makes boosted their status and legitimacy as a standard setting body. Larson & Stre...

... middle of paper ...

...& Bhutani,2012), etc., Jermakowicz & Gornik-Tomaszewski( 2006,p.192) observed that “there is general consensus that the transition to IFRS is a costly, complex and burdensome Process”.

Nigeria set a road map for the adoption of IFRS in 2010 with 2012 as the commencement of convergence commencing with public listed entities with other public interest entities on January 2013 and Small and Medium-Sized Entities on January 01, 2014. A lot of challenges was faced during the process of implementation. Madawaki(2012, p.156 ) argued that these challenges include knowledge gap, poor enforcement and compliance system, tax system and implications, legal system and poor awareness level.

To provide solution to these challenges which are evidences in all jurisdictions that have implemented IFRS, the cooperation of stakeholder is imperative in the solution to all impediments.