Financial Report : The Accounting Principles

950 WordsNov 16, 20154 Pages
The financial report as organized by the accountant is as per the accounting principles. The way the accounts manager wants the accounts to be prepared is against the reporting standards that are used in many nations. In this case, the standards ensure uniformity in the reporting framework and encourage international trade. In this case, this event is a post balance sheet event that has to be adjusted in the current financial year. It is an amount that has to be taxed in the current financial year. Taking it forward will reduce our tax liability in the current accounting period, as well as increase the tax liability in the following year. Accounting as a profession has its standards that must be followed. The standards are used across the world to enhance uniformity in the reporting framework of financial statements. This is due to the growth in the international trade and cross-boundary trade. Some of these standards include the international financial reporting standards (IFRS), the UD Generally Accepted Accounting Standards (GAAP). Transposing an event from one period to another subsequent period is an indication of a fraud when an auditor assesses the accounts. Therefore, moving the event will have an impact on the financial statements; both the balance sheet as well as the statement of financial performance of the organization. Being an income, this is revenue that will increase the net profit of the current year. In this regard, an increase in the revenue will increase
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