6 Consolidations: Qualitative 7 Why do regulators require consolidations? 7 What is fair value and why is it an important concept in consolidation? 7 Why do regulators require inter-company profits to be removed from consolidations? 7 Corporate Governance 8 What is ‘the public interest’ and what is its relationship to accounting? 8 Do we need mandatory regulation of reporting? If so how should we regulate? Are there major problems? 8 IASB and due process – what are the stages of due process – why is convergence with the US important? 9 What is the ‘market for corporate takeovers’ and the ‘market for managers’ – and what impact have these on accounting disclosure? 10 Reporting Financial Statements Why is one of the elements of the financial statements useful to shareholders? Statement of the changes in position of equity for a company provides the movement of the holding position of the equity shareholders. This statement generally comprises of the net profits that can be attributed to the shareholders, the changes in the share capital reserves, the dividend that is paid to the shareholder, the effect of the accounting policy changes or the any kind of changes that has been done to correct any error in the previous period. This is an essential statement that needs to be disclosed to the shareholders because the factors that have an effect on the changes in the position can be known. This statement would be reflecting the nature of the changes that take place in the equity reserves which otherwise would not be available to the shareholders. For example the issue and redemption of the share capital can only be obtained from the statement of financial position. What is the purpose of one kind of disclosure e.g. discontinued activities, or expenses such as audit? Discontinued operations of an enterprise would entail those activities by which the company would be selling a component through any transaction or demerger or would be disposing off the assets or liabilities of the organisation or abandoning any component of the business. It is important for a company to make the disclosures of the discontinued operations because it would help in assessing the cash flows of the enterprise, the capacity to generate earnings and to make proper segregation of the information about the discontinuing operations form that of the continuing operations. Organisations should cite the evidence of auditing process in the annual statements. Thus the fees that are paid for the auditing as well as the non auditing services need to be paid. On the other hand it is considered that the independence of the auditors is essential for a sound and fair auditing process. Hence by the payment of the fees the quality of auditing in the organisation is ensured. Earnings per Share Basic and diluted EPS Basic EPS is the earnings of the company that accrues to the shareholders of the organisation. Basic EPS is derived by dividing the net profit of the company by the total amount of outstanding shares. The amount net profit is calculated after distribution of the dividends to the preference shareholders. This may be explained with the example of the following example. Suppose the Net Profit available for a company is $ 40000. And the number of equity shares outstanding is 2000. Then the EPS of the company would be $50. Diluted EPS on the other hand is the net profit of the company divided by the number of equ
Financial Reporting and Accountability exam questions Contents Contents 1 Reporting Financial Statements 4 Why is one of the elements of the financial statements useful to shareholders? 4 What is the purpose of one kind of disclosure e.g. discontinued activities, or expenses such as audit?…
As the role of the auditor comes increasingly below the highlight pursuing up to date global financial instability, it is believed that it is essential that the accountancy occupation re evaluate the role of audit and guarantee and approach up with positive, realistic approach which both can help in developing and maintain profitable business.
Here it has been highlighted as to whether the company complied with any revisions or changes in accounting standards like AASB 101; and other accounting standards relating to intangible asset; provisions and contingent items etc. Any change adopted by the company in financial reporting for 2009 over the previous year has also been discussed.
Through financial statements, management provide the details of the accounts and any explanations and details which become part of the accounts as to how the different issues were treated and under what circumstances. Financial reporting however is based upon the combination of the international accounting standards as well as the local rules and regulations thus requiring firms to report their accounts according to the laid down standards and regulations.
10 hotels are managed directly, 652 of the hotels are managed by the company while an approximate of 3,900 hotels are under franchise agreements. The brands offered include, candle wood suites, crown plaza, holiday Inn, Even, Hotel Inn Express, Hotel Indigo, Intercontinental, Hualuxe and Staybridge Suites (IHG Annual report 2011).
Also, it can be very difficult to measure natural resources. The accounting profession may not be the best way to measure and value the world's resources because as the moon points out, "accountants will just cook the books". This already happens across the world with accountants, so there is nothing to suggest that it won't be the same with looking after the earth.
External Reporting to investors, government authorities and other outside parties on the organisation's finance position, operations and related activities. This information is also used by regulatory bodies like Internal Revenue Service. Sometimes the managers in other organization also use such information in their decision making.
Framework is that the relationship between financial accounting and economic reality is unidirectional, reflecting or faithfully reproducing relationship”, which presupposes that “economic reality exists objectively, intersubjectively, concretely and independently of
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