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It is necessary for large listed companies in different countries to prepare financial statements using uniform accounting stand - Assignment Example
Finance & Accounting
Pages 10 (2510 words)
Benefits and Drawbacks of International Financial Reporting Standards Name: Instructor: Course: Date: Benefits and Drawbacks of International Financial Reporting Standards Introduction International Financial Reporting Standards (IFRC) are accounting standards that are used by organizations to determine how a business’s transactions are reported and disclosed…
Financial accounting and managerial accounting deal with the preparation of accounting reports that provide information for decision making. Financial accounting deals with the preparation of financial statements such as the balance sheets and the profit and loss accounts. These are disclosed to both internal and external users. The internal users include the management and employees. Management accounting deals with the preparation of accounts that are used internally by management for decision making. Financial accounting statements are subject to the scrutiny of outsiders; potential investors, financial institutions and economic analysts compared to managerial accounts that are used internally by management (Ramanna & Sletten, 2009). Financial accounts provide information on the financial position and position of the business whereas management accounts provide information for planning, budgets and controls for management decision making. This explains why financial accounts need to follow certain standards compared to managerial accounts. Due to globalization, countries need to speak the same language internationally so that the accounts produced can be understood and improve investor confidence regardless of the country concerned. ...
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