A Report Based On Tweedie And Martinov- Bennie

As the business environment grows and companies find new ways to expand into their respective - or even new – markets, it is important that reporting standards stay up to date with changes and continue to assist companies in providing their users with useful accounting information. Information is labelled as being useful when it meets the

Ankarath, N., Ghosh, T.P., Alkafaji, Y. A., & Mehta, K. J. (2010). Understanding IFRS Fundamentals: International Financial Reporting Standards.

Despite those enormous advantages, it has been argued that IFRSS adoption lead to significant costs. The main argument is that IFRSs do not consider local needs and priorities as every country has their own ‘business environment, legal systems, cultures, language and political environment’ (Henderson and Peirson, 2000 cited from Malthus, S., 2004). However, to overcome this problem, IASB can accommodate flexible reporting standards that enable companies to choose alternatives that are more suitable for their external condition. It is opinion of some opponents of IFRS adoption that IAS is ‘insufficiently detailed’ (Uddin,M.S., 2005, p.4) that require accountants’ and auditor’ professional judgment. However, overly detail might be contra productive and not flexible in anticipating every changes and differences.

This report has been compiled for the Chief Accountant of the Australian Securities and Investment Commission (ASIC). Its aim is to provide an analysis of how international financial reporting standards (IFRS) have improved reporting quality. This report found that there has been a recent move to using these standards as a blanket standard in most Western countries as the need for consistency in financial reporting is obvious in a more globalised world.

Financial reporting is the communication of financial information n to relevant stakeholders. The reporting may include general purpose reports such the balance sheets, equity reports and balance sheets. Additionally, the items such as press releases meeting minutes, and auditors reports are included as part of the financial reports (Greuning, 2009). The reporting of financial information depends on the regulatory body under which the company operates. Questions have been raised on the different evaluation of financial records employed by the regulatory bodies. Both US GAAP and IFRS have weaknesses that affect the financial reporting by either complicating the reporting or being too general to accommodate special cases.

Increasing attention is being paid to narrative reporting or the ‘front end’ of the annual report. All companies are currently required to prepare a directors’ report containing certain basic information.

The purpose of this report is to address the complexity of financial reporting and how the International Accounting Standards Board (IASB) intends to do address this problem through its ‘Disclosure Initiative’.

An Integrated report is a brief statement issued by an organization that includes financial and non-financial information regarding the organization’s strategy, governance, performance and prospects with the view of explaining the formation of value in the short, medium and long term in regards to its external environment. While some view Integrated reporting (IR) as having the potential to create value in many industries, others see integrated reporting as simply a merger of financial and sustainability report into a single document. (Sokya, 2013)

Financial reporting is a branch of accounting which involves presenting the financial information of a company to the stakeholders so that they can be in a position to evaluate its financial performance and make an informed decision based on the information. There are two general sets of standards governing financial reporting in the major economies across the world. They include the International Financial Reporting Standards (IFRS) regulated by the International Accounting Standards Board (IASB) and the United States Generally Accepted Accounting Principles (US GAAP) governed by the Financial Accounting Standards Board (FASB). The following academic paper seeks to analyze the debate that has been ongoing on whether the US limited companies should adopt the use of IFRS in their financial reporting as proposed by the Securities and Exchange Commission (SEC) in August 2008.

There are many different types of accounting standards and principles in the business world. It would be difficult for financial markets to operate and compare reports with these different various standards. Therefore, the International Accounting Stands Board have developed a new way of reporting financial information. The International Financial Reporting Standards (IFRS) foundation and the International Accounting Standards Board (IASB) were established in 2001 in order to develop a set of high quality and acceptable financial accounting standards. ("IFRS - Organisation history", 2016). The aim of this report is to firstly summarise the significant changes in the Australian Accounting Standards Board (AASB 15) and how they address perceived deficiencies in the current standards. Then, it will highlight the future implications of adopting the AASB 15 for Australian companies.

Through the analysis of these studies and journal articles, we will examine the different aspects of IFRS, the purpose of IFRS and overall whether it has provided an increase or decrease in accounting qualities within firms’ financial reporting.

As for the level and quality of transparency of financial statements, companies operating under the standards of their local Generally Accepted Accounting Principles (GAAP) may continues to present information that may be false and asymmetric. However, other companies that are committing to the IFRS will continue to present information that is clear and understandable (Horton, Serafeim and Serafeim, 2008). The adopted reporting standards require information that is more qualitative and quantitative to be attached to the disclosure of financial statements, which was not highly required by local GAAP (Wright and Hobbs, 2010, p. 23). To increase transparency, “it requires companies to disclose accounting policies, judgements and estimates, as well as additional qualitative and quantitative information related to significant accounting transactions” (Wright and Hobbs, 2010, p. 22). Reporting the substance of transactions by commenting on the realities of what the entities or companies present regarding information about

The International Financial Reporting Standards (IFRS) have made an impact on the foundations of accounting, resulting in a different stance from the prior UK GAAP. Some of the more noticeable changes included; the increase of government resources being allocated to the standard. Companies will be required to provide all information of the incoming and expenditure of all money and assets under the new regulations. The presentation and terminology were altered in the current “Income Statement” and “Statement of Financial Position” leading to a change of some aspects on the budgets and estimates. “Fair value”; the unbiased evaluation of an assets potential market

Many companies understand that in order to attract people fund in their entities and support them in their long- term operation, information of financial report are one of the most vital requirements for achieving this goal. By referring to the IASB Conceptual Framework of financial reporting in 2010,

The existing Conceptual Framework of IASB’s was developed by its predecessor body IASC (International Accounting Standards Committee) in 1989. The material on the objective of financial reporting was first revised by the IASB in 2010 with the US national standard-setter, the Financial Accounting Standards Board (FASB). This ED sets out the proposal for a revised Conceptual framework. It has been developed on the behalf of responses received on (‘the Discussion Paper) which was published in July 2013. (IFRS, May 2015)