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Structure of international financial reporting standards in various countries
Structure of international financial reporting standards in various countries
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I am writing this letter to set out an argument for making changes to the current system of accounting and financial regulations in relation to corporate reporting.
Good corporate reporting is commonly defined as an indication of superior corporate governance and competitiveness. Good reports show creativity and effort on the part of the preparers. Due to many changes in the external reporting environment there have been proposals put forward to enable fundamental changes into the practices of corporate reporting. There has been a demand for a variety of new information types; this in particular includes forward-looking, non- financial and soft information. “Openness and transparency in annual reporting on an unprecedented scale may be inevitable with the adoption of International Financial Reporting Standards (IFRS).1 (Can use as a reference)
Conceptual Framework may not be seen as an IFRS in itself, and individual standards and interpretations can override the requirements necessary. Without question it is the most important document of all as it sets out the principles for the...
The Securities and Exchange Commission requires that publicly owned businesses provide annual reports, which are available to the public. Many different people use annual reports, to make informed business decisions. Management from the company uses the information to determine a number of items. Some of these items are the profitability of the company, the inventory turnover rate, and the accounts receivables rate. Creditors use the annual report to determine how well a company can satisfy its current liabilities, as well as, how the company is doing in the aspect of long tem survival. Another group of people who use the annual reports furnished by companies are the investors, who can purchase shares of stock from the publicly company. Annual reports are very important to these people, because they are an over all picture to help them determine the over all stability and reliability of the company’s financial outlook. These annual reports are important because they do not only contain the financial statements of the company, but there is a management ‘s note to discuss reasons for any unexpected numbers, and an auditor’s report, from an independent accounting firm, who either agrees or disagrees with the financial numbers. Market reporter Matt Krant said, “Ignoring these reports is akin to driving down the freeway blindfolded.”
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)
I would like to propose the following changes and/or additions to the Security and Exchange Commission’s regulations. These changes are in regards to the last ten years of corporate fraud in the financial world involving such companies as Enron, WorldCom, Tyco, and Xerox. The primary changes include the addition of a Reserve Bond and an adjustment in the Bounty Payment program. Secondary changes include a Board of Directors mix-up program for securities companies, and SEC involvement in external auditing.
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
“An audit partner at a national CPA firm ... says if a change would enable a company to better communicate the results of its business to stakeholders, the company should make the change even
In conclusion, a company’s financial statements regarding its financial position are critical to all concerned. First and foremost, these financial statements provide critical tools for companies to make decisions to improve its share value in the global market of fierce competition. Secondly, they provide accountability to shareholders and stakeholders in the company providing better stability in its business practices and requirements regarding the Securities Exchange Commission (SEC) and General Accepted Accounting Principles (GAAP). Lastly, financial statements paint a picture that gives a measurable to the success of a dream once birthed long ago by an entrepreneur to get an idea to the marketplace with great expectations of striking it rich.
The Zachman framework is an enterprise architecture framework that does provide a formal and also highly structured way of viewing and also defining an enterprise or organization. This architecture framework usually have a two dimensional classification matrix of 36 cells that is usually based on the intersection of six kind of communication questions in its columns (where, what, why, when, who and how) with six rows levels of reification (Scope, technology model, business model, system model, components and working system) and actively transforming most difficult ideas into a more concrete ideas (Fishman, 2003). The matrix of this framework usually constitutes the overall set of descriptive representations which are relevant for describing something in an enterprise or organization. Therefore in real sense, Zachman framework is really a logical structure which is intended to give an overall representation of an IT enterprise. This architecture framework usually allow uses of multiple perspectives and also categorization of business artifacts. Zachman framework is therefore used by various level of management to gather and refine principles mostly from the older methods and then restructuring them into new ideas based on the business strategies and objectives (Ramadan, 2003). This framework usually incorporates independent tools and methods that are usually used by IT.
Schofield (2014) researches the difference between public and private company financial reporting. For instance, a private company has fewer consumers reviewing their financial statements, whereas public companies could have multiple consumers reviewing financial statements. In addition, private companies typically have less specialized accounting personnel, whereas public companies will have several. Lastly, Schofield (2014), reviewed the number of amendments proposed and finalized to help benefit private companies financial reporting.
My job includes performing tax returns, audit engagements, and bookkeeping services for clients. The firm’s clients consist of retail, manufacturing, oil and gas, financial services, real estate, construction, and legal companies. One specific duty I perform is the preparation of financial statements for clients which assist them in making critical and strategic business decisions. The work I do for them will have a direct impact on the profitability and solvency of their company; so, I must make every effort to ensure our work reflects honesty and is in accordance with generally accepted accounting principles (GAAP). Work that is performed with a high standard of integrity and professionalism enhances the reputation of Smith Carney, but also increases the likelihood of client loyalty for future years to
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.
The Purpose of Financial Statements The financial statements of a business are used to provide information about the status of the business, set performance targets and impose restrictions on the managers of the firm as well as provide an easier method for financial planning. The financial statements consist of the Profit and Loss Account, Balance Sheet and the Cash Flow Statement. There are four areas of information, which we can collect from a company's financial statements. They are: Ÿ Profitability - This information comes from the Profit and Loss account. Were we can compare this year's profit with the previous years.
The globalization of business has resulted in the need for compatible accounting standards that can be used internationally for financial reporting. As a result, the International Financial Reporting Standards (IFRS) were developed by the International Accounting Standards Board (IASB) to unify the various financial reporting methods and create a single accounting standard which can be applied to any financial statement worldwide (Byatt). The global standardization of financial reporting will increase the readability and enhance comparability of globally traded companies’ financial statements, without the need of conversion or translation. There are a few main differences between the International Financial Reporting Standards (IFRS) and the U.S. Generally Accepted Accounting Principles (U.S GAAP). The increasing recognition and acceptance of the International Financial Reporting Standards by accounting professionals in the United States, will affect the way in which the U.S will record financial statements in the future.
Financial reporting is an example of an ethical problem for an organization or business. Many busin...
Accounting is a very important term to our modern society. It is the career for men and women who at the start have their eyes set on top positions in industry, management, government, and general business. Accounting is a basic need of every businessman, from the operator of a filling station to the government of the United States. It's so important to our society. None of the business organization can operate without is. They are there-somewhere-in every business. In small business, people use pen, ink and skill keep the records. In large business, modern accounting machines are used to operate. Men and women are directing these machines in the accounting process. Wise businessmen enter business must have some accounting knowledge.
Balance sheet is a financial statement which is widely used by accountants for businesses. Balance sheet is also known as the statement of financial position because it helps us to present company’s financial position at the end of a specified period. (fresh books, 2016)