Particular emphasis is given on faithful representation, as an indicator of the reliability of financial statements. Also, the circumstances under which true and fair override apply are identified and explained. It is proved that faithful representation, in its current form, is something more than simple a compliance with accounting standards.
One of the most critical issues when having to evaluate the quality of financial statements is that these statements should achieve faithful representation. In order to understand the role of ‘faithful representation’, as an element of the financial reporting systems, it would be necessary to refer to these systems, as the basis on which a firm’s financial practices are usually based. In accordance with Uddin et al., two major financial reporting systems are considered as the most credible for businesses in all sectors: the US Generally Accepted Accounting Principles (US GAAP) and the IFRS.1 The use of one of these systems, which have been appropriately tested as of the effectiveness in financial reporting, results to the increase of credibility of the local economy. From this point of view, it has been proved that the use of these systems within a particular country leads to the increase of the foreign direct investment (FDI) to the above country. Thus, accounting standards and financial reporting are closely related to the performance of the local economy, of course under the terms that global financial markets are stabilized, i.e. that these markets do not suffer from delays in the implementation of financial and other projects.
In the literature the term ‘faithful representation’ has been given various explanations, which are all similar. For example, in the study of Hussey reference is made to the use of the term faithful representation in order to show the reliability of the financial statements involved.2 In other words, the specific ...
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(Financial Reporting Systems and Economic Development Essay)
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The author provides examples of company’s financial reports with the constructive information that should offer a fair, faithful presentation and should give a ‘true and fair view” of the financial position of business so that the stakeholders can take informed decision on such financial information.
If a company complies with the international accounting standard, it will likely achieve a faithful representation of its financial performance; as well as it will provide the basis for analysis of the company’s position on the global market and further prospects for development of its business.
The first issue was the credit crisis which had spread from US banks to Korea and Russia. The core of the problem is that many companies have failed to provide fair and accurate description of financial standing. Besides credit crisis other issues which are included in this article is off-balance-sheet financing and pension fund accounting.
Reference should be made particularly to the information incorporated in the financial statements of organizations worldwide. The development of international accounting standards has been considered as the appropriate solution for ensuring the quality of information related to the performance of businesses, as this performance is reflected in the firms’ financial statements.
42). A clear basis for this is increasing argument that accounting information has a vital fiscal effect on the society. As a result, the information presented in financial reports is directly linked with the usefulness that accounting standards have for the informational requirements of users.
The paper comprises 3 questions, each related to aspects pertaining to environmental reporting. It begins with an initial introduction about the aspects of environmental compliance and reporting.The first question is in connection with two provided annual reports of Halma plc and United Utilities plc, which required critical evaluation adequacy of disclosures given in the reports regarding environmental reporting.
To support such changes, companies have altered their management accounting practices to adapt to the ever changing environment. There is sufficient research done by the authors discussed in this work, to support such a statement.
It is known that financial statements offer comprehensive information on the reporting firm, which is useful to existing and potential stakeholders (Rudžionienė 2006, p. 52). This paper will discuss this
eporting various factors such as the nation’s political state, environmental and legal among others tend to affect from the outside of accounting and this has hampered the development of the financial reporting in diverse nations. This essay seeks to examine the aspects that
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