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current issues in financial reporting - Essay Example
Finance & Accounting
Pages 5 (1255 words)
Running Head: Current Issues in Financial Reporting Current Issues in Financial Reporting Current Issues in Financial Reporting One of the persistent concerns in accounting is “how accounting information can (and cannot) be used, for what purposes and by whom” (Kirk, 2000, p…
Because of this, there is a huge interest as well as apprehension regarding the basis upon which accounting data is collected and reported. Thus, the statement made by Solomons (1991) that ‘[i]f accounting is to retain any credibility – and without credibility it is worthless – its guiding light must be neutrality in financial reporting’, surely, assumes that the records on a balance sheet or profit and loss statement ought to be a precise indication of a business’s performance. This, unarguably, is the function of accounting. It is a language that explains as well as communicates features of company to its owners along with other concerned parties. The goals of financial statement turn out to be intricate during current years as the quantity and complication of disclosures have risen, and the users of financial statement have become even more demanding. Accounts are no longer merely a description of earlier activity and existing solvency. In the present day, investors as well as other users of accounts anticipate to be able to utilize them to estimate business’s potential and to predict its success. Accounting information within financial statement may well be precise in the solely legal aspect but may not expose fiscal or business truth. ...
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