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High Profile corporate collapses in the last two decades have been attributed to laxities in the regulatory framework of financi - Assignment Example

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Undergraduate
Assignment
Finance & Accounting
Pages 10 (2510 words)

Summary

Financial reporting Table of Contents Table of Contents 2 Introduction 3 Arguments in favour of financial reporting regulation 4 Arguments against regulation of financial reporting 8 Conclusion 11 References 12 Introduction One of the major events in the history of accounting is the implementation of IFRS across the European Union from January 2005…

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High Profile corporate collapses in the last two decades have been attributed to laxities in the regulatory framework of financi

In June 2002, the EU has adopted a regulation to prepare their financial statements in agreement with IFRS or IAS which is required to be followed by all listed European Union companies in the regulated markets. Companies are open to select their national reporting standards and follow Generally Accepted Accounting Principles (GAAP) for associate and subsidiary companies. The regulation is applicable only on the consolidated accounts. The regulation came into consideration from the year 2005 (PwC, 2005). With an aim to develop common accounting standards in 1973, nine countries including UK formed International Accounting Standards Committee (IASC). Over hundred countries have it’s become members. Countries, especially bigger economies, are bringing in their own perspectives and adapting to this accounting standards. In coming up with common acceptable accounting standards IASC had to deal with accounting conflictions (Accounting Standards Board, 1999). IASC has not been successful in resolving all the conflicts with all member countries as it is nearly an impossible task to fully satisfy more than hundred accounting bodies from across the world. International Financial Reporting Standards (IFRS) or International Accounting Standards (IAS) is applicable to more than 90 countries. ...
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