Uniform accounting standards produce uniform financial reporting. Discuss and evaluate the above statement in the context of the International Financial Reporting Standards (IFRS)

decreasing reliability may make income statement more volatile. 1. COMPARABILITY 1.1 Definition of comparability According to Canadian GAAP, the definition of comparability is “Financial information measured and reported in a similar manner among different companies. Comparability allows analysts to identify real economic similarities and differences among companies, because those differences and similarities are not obscured by changes in accounting methods or disclosure practices.” In…

form of standardized accounting, it would be very difficult for other external users to compare the performances of these companies as different methods of accounting process have been used for the same transactions, that is, the purchasing of an asset. To avert these problems and to have a synchronized form of financial reports, certain concepts and conventions have being set up by certain accounting bodies, these are briefly discussed below The Accounting standard boards (ASB) which is…

In accounting, private companies are treated differently than governmental and non-profit companies. However governmental and non-profit companies use different reporting requirements from the private sector. The requirements for governmental companies use the Government Accounting Standards Board (GASB), whereas profit and non-profit companies use the Financial Accounting Standards Board. This paper will explain the purpose, discus the similarities, and differences between the GASB and FASB.…

national standard-setters in its efforts to reduce the diversity of financial reporting practices. The IASC started its comparability project in 1987 and the following year it published E32: Comparability of Financial Statements. Also in 1988, the FASB joined the IASC Board as an observer and in 2000 lent support to having international standards. The growth and influence of the IASC was further confirmed that same year when the European Commission announced plans to require IASC standards for all…

According to the management’s report on internal control over financial reporting; “the management of UTC is responsible for establishing and maintaining adequate internal control over financial reporting” (UTC Financials, 2008). This internal control method is intended to impart reasonable assurance pertaining to the reliability of UTC financial reporting and preparation of financial statements in accordance with GAAP in the United States of America. The management at UTC uses criteria set forth…

– Topic is related to GAAP 2. Presentation – Topics relates to presentation of financial statements 3. Financial Statement Accounts – Topics are in a financial statement order starting with Assets, Liabilities, Equity, Revenue, and ending with Expenses. 4. Broad Transactions – Are transaction-oriented topics that are related to multiple financial statement accounts. 5. Industry – Topics that relate to accounting that is unique to an industry The second level in the hierarchy is the subtopic…

their true financial statements for several years with the help of their auditor. Arthur Anderson, the company’s auditor signed off on the validity of the company’s accounts despite the inaccuracies in the financial statements (Accounting ethics, 2011, para. 12). As a result of Arthur Anderson engaging in unethical practices, Enron’s shareholders lost their money when the company went into bankruptcy, Arthur Andersen employees lost their jobs, and the company went out of business (Accounting ethics…

closely with its stakeholders. The purpose of IASB is providing accounting standards that require high quality information for financial accounting, which will help the users make effective decisions. IFRIC expands on the interpretations of the IFRS’s and the International Accounting Standards. IFRIC provide guidance on the interpretations of IFRS on financial reporting issues. If the existing standards do not cover some areas of reporting then the IFRIC can provide guidance on those areas. However…

Because of information Asymmetry and comparability that management should not be given complete freedom to determine what accounting information should be included in the published financial statements. In that case, managers do not have access to information about all aspects of the organization’s activites, which also helps the user accounts to compare the performance of an organization either through time or with the performance of other organizations. The external users of accounts…

that: “International investment decisions and financial-based management decisions are then made with less risk. [...] Regulators and auditors will be receiving the same information, facilitating the evaluation process. [...] International accounting standards will allow nations' tariffs, quotas and other trade restraint mechanisms to be more accurate and less risky for those engaged in trade.” The universal set of accounting standards can thus be understood by anyone around the accounting world…