The role of International Financial Reporting Standards - Essay Example

Management of number and the role of International Financial Reporting Standards Many organizations are beleaguered by entropy, carrying the prevailing information of the company’s useful reports. Often, managers as well as senior personnel within an organization may lack skills and knowledge to handle and keep the company data and that why the aspect of managing numbers comes at hand. This facet consists of mathematical approach that most of managers do not have insight towards the norm and get scared of the mathematical issue. Other prevailing issue as per the management of numbers is that most of seniors as well as managers are busy that they do not have time give attention as far as the aspect of company data analysis and its interpretation is of more concern (Cunningham and Fiume 10-15). Many companies however, prefer to adapt the issue of numbers management for realizing their level of production. One of the companies that have adopted numbers management is the wall mart companies, one of the largest fashion companies on this world. Senior manager have articulated this norm with saying that their clients usually ask help to make them understand why workload within the company is at increase norm compared from the previous years Wal-Mart have been providing its services. Cumulatively, number management produces a stable, repeatable, and predictable pattern of variation in the output of a process as far as the aspect the aspect of business is taken into consideration. Some of the factors leading to the control of numbers and its management includes; capability of equipments, the level of training given to staff, and the choice and specification of paperwork/materials used in the process. Special Causes arise from time to time, with an unstable and unpredictable pattern. They are however, often within the control of staff or work-teams, for example in setting up and following procedures, using the correct paperwork or information (Cunningham and Fiume 21-25). Wall-mart being one of the outstanding business company worlds has had bad articulation as availed by Johnson. It is realized that in the year 2009 the company practiced manipulation on inventory counts, which is believed that it extended beyond Carmon supervised regions anticipated. As per the research, it showed that wall-mart organization decided to shrink rate of over 400 of their stores around the United States of America country, one of the issue that astonished Johnson, who was an employee and a senior manager by then. At the world of business, competition norm is evitable and that is why a standard practice comes at hand and makes us consider giving shrinkage rate of other stores an attention. Management of number generally affects only minority of people, equipment, procedures, or materials and a control Chart becomes the main tool used in SPC to give a visual representation of process performance based on data collected from the process. SPC helps one to identify any prevailing statistically significant variation that channelizes the aspect of corrective action. The Control Chart provides direction on when to take a concrete action and this in turn avoids the essence of error production. However, it also gives an oversight on when not to take an action and this avoids any possibility of over-adjustment or over-reacting from both the clients as well as employees (Cunningham and Fiume 32-36). Projecting the aspect of wall-mart numbers management, Johnson states that “It was a standard practice to look at [the shrink rates of] other stores because everyone competes with each other,” Johnson said. “When you see these overages in there that clearly should be investigated but the regional VP is saying ‘this is exactly what we're looking for,’ or ‘outstanding job,’ it is a point of concern,” Johnson said. “I think there is an unspoken culture at Wall-mart that a store is allowed to have excessive overages if it makes that store and the company look more profitable.” We know that wall-mart is one of the famous company initiated the use of information technology domains for effective delivery which is administered through its retail supply chain management domain. When data of any given company falls between any prevailing control limits, this indicates variation anticipation and thus meaning that data of that company points outside the desirable limits. There are also some rules about patterns of data points, which can also indicate Special Causes are present.There, are only two ways to show that performance has improved, Either the process average has changed (moved higher or lower), or the process variation has reduced (the UCL & LCL lines are closer together). If you cannot show one or other of these, then you cannot say that performance has improved. The task of the Management of any company is to make to challenge Process Owners and operators to change the level of performance and/or reduce the amount of variation simple. International Financial Reporting Standards This set of international accounting standards has the mandate to state on how particular transactions as well as other events should be availed adhering to the prevailing financial statements. The main goal of International Financial Reporting Standards is to create ease articulation of international comparisons among various nations worldwide. The goal of IFRS is to provide a global framework for how public companies prepare and disclose their financial statements. IFRS provides general guidance for the preparation of financial statements, rather than setting rules for industry-specific reporting. Having an international standard board existing worldwide, it creates a way of uniformity for large companies that have subsidiaries in different countries. Adopting a single set of worldwide standards simplifies accounting procedures by allowing a company to use one reporting language throughout their accounting procedural activities. A single standard also provides investors and auditors with a cohesive view of finances. Currently, over 100 countries permit or require IFRS for public companies, with more countries expected to transition to IFRS by 2015. Proponents of IFRS as an international standard maintain that the cost of implementing IFRS could be offset by the potential for compliance to improve credit ratings (Mirza and Knorr 13-17). Meanwhile, the purpose of international financial standards is to bring the essence of adherence as far as conversion of standards availed on underway meets that international accounting standards and interpretations requirements is of concern. This develops predominant rules based approach commonly noted in other accounting principles such as GAAP. An EU regulation requires listed companies in Europe to adhere to International Financial Reporting Standards (IFRS) from financial years commencing on or after 1 January 2005 when preparing their consolidated accounts. In implementing this in UK legislation the Government has not yet made the use of IFRS compulsory for any further categories of accounts, but the legislation permits all companies to use them for individual and consolidated accounts if they wish. Number management produces a stable, repeatable, and predictable pattern of variation in the output of a process as far as the aspect the aspect of business is taken into consideration. Some of the factors leading to the control of numbers and its management includes; capability of equipments, the level of training given to staff, and the choice and specification of paperwork/materials used in the process. Up to date, IFRS standards have been implemented or permitted in almost 100 countries worldwide. The Canadian Accounting Standards Board (AcSB) recently issued its IFRS exposure draft “Adopting IFRSs in Canada, II” and is inviting the public to comment by May 15, 2009.  In this draft, the AcSB has amended the definition of “publicly accountable enterprises,” and confirmed that pension plans will continue to report under Canadian GAAP, Section 4100 of the Canadian Institute of Chartered Accountants Handbook. We are currently reviewing this document with our advisors, and we will continue to provide you with more information and will support your needs as they arise throughout the national transition to IFRS. Works Cited Cunningham, Jean and Fiume, Orest. Real Numbers: Management Accounting in a Lean Organization Hardcover. Canada: Managing Times Press, 2003. Print. Mirza, Abbas and Knorr, Liesel. Wiley IFRS: Practical Implementation Guide and Workbook (Wiley Regulatory Reporting) [Paperback]. New York: Wiley, 2011. Print. Read More