Financial Reporting And The International Accounting Standards Essay

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Introduction & Purpose
Complexity in financial reporting is apparent especially when applying it to relevant accounting theories. "Complexity is ' 'the state of being difficult to understand and apply ' ' (SEC 2008, cited in Petersen, 2012). When we apply complexity to accounting we think of it in terms of applying it to accounting transactions which flow onto financial statements and how these were developed from the Accounting Standards. (Peterson, 2012, p.73). 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’.
The International Financial Reporting Standards (IFRS) is the international accounting standards developed by the ISAB. The ISAB have set up the Disclosure Initiative to examine where IFRS could be improved.
We will examine the complexity of financial reporting and how it applies to Positive Accounting Theory (PAT). We will also discuss how measurement of financial reporting effects the complexity of financial statements in terms of fair value and historical cost methods. We will use supporting evidence from peer reviewed journal articles to support our argument. We will then present our findings and recommendations to the Corporate Governance Council Chairman of Australian Securities Exchange (ASX).

The Opportunistic View
Agency theory refers to the relationship between the owners
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