Purpose And Context Of International Financial Reporting

In order to succeed in any business, it is extremely important to understand the stock market. In this assignment we were asked to follow the stock market continuously for four months and understand the market. The stock market is a global marketplace, where goods and services are traded in the form of equities.

In 1853, first association of professional accountants, it also can be regarded as the beginning of the modern accounting profession. The UK accounting system is conducive to a principles-based approach rather than a rules-based approach to standard setting. Furthermore, the UK 's politic system is common law, which shows that accounting system in the UK has relatively fewer statutes, more interpretation and tends to be more flexible, adaptive and innovative, etc. Also, taxation does not have influence on accounting system, but Germany and Japan are in opposite Therefore, these all can have a significant influence on accounting system in the UK.

Investment in shares of corporate stock is also very popular that can produce a great amount of profit. By investing in shares of a firm listed on a stock exchange, the investor owns part of the company and also gets the right to share in the future income of the company. Returns on stock come in two ways; first, dividends are paid out of the profit accumulated by the company over a year. Secondly, the investor can sell his or her shares of stock for more than originally paid. Gains may reflect that the company over time has grown or improved or that the investment society sees future prospects. But then capital losses can also occur. The price of shares listed for a company can vary from day to day. On a given day some shares may go up in value and some may go down in vale, depending on how investors view the prospects of each company. Also rises and falls in economic confidence or changes in a particular industry may cause the value of stocks to rise or either fall. There are ranges of factors, which influence stock prices on a daily basis stocks cannot be accurately predicted. Shares of stocks are riskier than

During the PRE-IFRS accounting system and where worldwide accounting diversity was widespread, a number of PRE-IFRS developmental factors were found to be the cause behind international differences in ownership and financing of companies and led to differences in the financial reporting practices of multi-national corporations (MNCs). This type of environment created extensive opportunities for corruption and poor performance and made it hard to compare global companies. The following four main PRE-IFRS development factors have the biggest impact on international business accounting practices: source of finance, legal system, taxation system and political and economic ties (Meek & Saudagaran, 1990). Even though the International Financial

Stock exchange or stock market is an organized and regulated financial market where securities such as bonds, notes and shares are bought and sold at prices governed by the forcesof demand and supply. Stock exchanges basically serve as primary markets and secondary markets. The primary market is where corporations, governments, municipalities and other incorporated bodies can raise capital by channeling savings of the investors into productive ventures and secondary markets is where investors can sell their securities to other investors for cash, thus reducing the risk of investment and maintaining liquidity in the system.

Global interdependence and the existence of large multinational enterprises create a need for global accounting. Multinational corporations are companies that carry out business in more than one country other than their home. Companies go global for many reasons: to increase sales, improve profits and innovation. Decentralization is essential for the creation of large firms, because CEOs are otherwise constrained in the number of decisions they can make directly -- it is therefore critical for enabling productive firms to grow large and to take market share from unproductive ones. Because trust is strongly linked with more decentralization, it in turn affects productivity. The absence of trust, in developing countries like Brazil, China, and India, explains why productive firms do not grow large and drive out unproductive firms from the market place. Decentralization presents problems within itself. With this, Management accounting is a system of measuring and providing operational and financial information that drives management’s actions in areas of actions and behavior. Unlike financial, managements accounting generates reports for personnel inside the organization, not stakeholders. It’s purpose is to an organization reach its strategic objectives. Internationally the primary strategic goals of managerial accounting are global efficiency, multinational flexibility and worldwide learning. This initiates emphasis on planning and control.

Office hours: Thursday 4:30-5:30: as announced in class; and by appointment. (NOTE: I am typically in most weekdays, and appointments—face-to-face or telephone—are typically easy to arrange. I am also available by e-mail.)

Abercrombie & Fitch uses generally accepted accounting principles (GAAP) as the basis for the production of its financial statements. In contrast, Hennes & Mauritz (H&M) uses international financial report standards (IFRS). H&M also utilizes Swedish GAAP. For its annual report, there is no indication of what standard is used, and there are no official financial statements. H&M does not note what auditing standards it uses in its annual report. By contrast, the ANF Form 10-K notes that the company's auditors use the Internal Control Integrated Framework as laid out by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), as noted on page 100 of the 2011 Annual Report.

I. Securities Markets A) Types of Securities Markets 1. The Primary Market a. Going Public: The IPO Process b. The Investment Banker’s Role 2. Secondary Markets B) Organized Securities Exchanges 1. The New York Stock Exchange a. Trading Activity b. Listing Policies 2. The American Stock Exchange 3. Regional Stock Exchanges 4. Options Exchanges 5. Futures Exchanges C) The Over-the-Counter Market 1. New Issues and Secondary Distributions 2. The Role of Dealers 3. Nasdaq 4. Alternative Trading Systems D) General Market Conditions: Bull or Bear Concepts in Review II. Globalization of Securities Markets A) Growing Importance of International Markets B) International Investment

Initial Public Offerings are when any type of security is sold to the public for the first time within a company’s history. The main reason for this is to hope that a liquid market will grow within this security, where people are trading shares on a daily basis. The reason that I have decided to do research on IPO’s is because it sounds very simple, yet there are many things that must be done in order to reach a point to offer an IPO and there are also many ups and downs for companies to weigh to see if it is worth taking their security to the general public. Throughout this paper I will introduce to you why company’s want to issue IPO’s, how they do it, and how they try to create the initial price per share. Along with those key ideas, I will talk about why most IPO’s are underpriced when they go to market, price changes once on the market, and lockup agreements. Finally, I am going to give a few examples of recent IPO’s such as Facebook and Sportsman’s Warehouse, and other IPO “fallouts.”

In order for capital markets in the U.S. economy to operate effectively, corporate governance measures are needed to ensure adequate controls. Corporate governance is the system of regulations and processes in which various interests both directly and indirectly guide a company’s relationship with the capital marketplace. Businesses have obligations to various groups of stakeholders whom rely on financial reporting information in order to make sound market decisions. The reforms under ACA conform to the corporate governance model as presented in Figure 1. ACA legislation demonstrates the marketplace’s demand for universal healthcare coverage and reforms. Functioning under the employer mandate, companies must provide transparent and high quality reports to demonstrate compliance. In addition, since most of the provisions under ACA and the employer mandate are tax related, this causes most of the reporting process to take place on tax returns and monitoring to be fulfilled by the IRS.

Frieda, an accounting student, states: “Strategy analysis seems to be an unnecessary detour in doing financial statement analysis. Why can’t we just get straight to the accounting issues? “Explain to Frieda why she might be wrong.

The stock market has been the basis of finance in America for over a century, but it was a long road for the modern stock exchange. Trading profits and portions of companies have been a part of making money for hundreds of years, which then lead to the formation of the current complex system of trading, biding, selling and buying on the trading floor. Throughout history the intricate stock market system has become the staple of American and global economics.

There have been plenty of debates surrounding the two type standards; on one side we have the United States General Accepted Accounting Principle (GAAP) which has always been used until now with International Financial Reporting Standards (IFRS). A committee of accountants from the American Institute of Accountants (AIA) created the first set of US GAAP standards in the 1930s. US GAAP is a set of guidelines made to help publicly traded companies create their financial statements. The International Financial Reporting Standards (IFRS) serves a similar purpose, but has been globally accepted. European companies first adopted IFRS in 2005, and by 2012 countries such as Japan, Canada, and India had done the same. Since early 2010, FASB and IASB have been working together to converge both of these accounting standards. The SEC has been on board, and although they have not been successful yet, a Work Plan has been developed which lays out factors, which need to be considered before transitioning into a new reporting system. The main topic for this paper is pension and how both differ from GAAP and IFRS. In the research, it will mainly geared towards pension plan and the benefits that differ between the U.S GAAP and IFRS. Through the research the main information comes from the income statement of the company to identify the difference.

Auditors, accountants, and companies must comply with the regulations as recommended by the International Financial Reporting Standards (IFRS). Disputes concerning convergence issues and compliance may arise between companies and the auditors. In the case of dispute, the companies and the auditor should consider alternative dispute resolving mechanisms which are faster, less expensive and less adversarial than traditional litigation.