There appears no true definition under the ordinance or the HKAS. Most cases require the knowledge of the accountant discretion. When companies comply with the Company’s Ordinance the HKAS depicts the situation as true and fair. The moment there appears a problem; the term comes straight from the legislative or the investment discretion (Oporowski, 2005). Hong Kong citizens tend to analyze the connection found among corporate operation reporting releases. Basing the argument to the results of a, certain company in, Hong Kong years 2011 shows that, Firms experiencing a high earning level, rarely releases the information to the yearly press disclosure. Companies that end up releasing their press disclosures display a heightened impression management. The implication here proves that managers who handle their practices engage in it at varied levels related to the firms’ communications. The ultimate information found in such communications proves that the corporations release information that lures the outsiders to view the firm’s performance in a way that they desire (Chartered Institute of Management Accountants, 2011). Analysis of the Topic Issue Using Financial Theory The issues on manipulation The manipulation of data by the managers creates a wrong impression of the company, which later affects the issuance, and the content of the yearly results press releases. The manipulation of the financial reports leaves the public with numerous questions. The questions range from; whether the firm is trying to run away from legal implications, or it just wants to limit the information about the firm that can be viewed by the members of the public. Managers utilize the secretive nature presented by the members of the press release in facilitating manipulating figure to lure the customers and potential investors of the credibility of their corporate bodies. Another possible reason for the act comes from, or excluding the amount of individuals to reduce impression operations in the Hong Kong Accounting Standard (HKAS) 1 or entirely shun the release practice. Some researchers such as Godfrey et al argue that; earning management directly relates to graphical perception management coupled with explanatory impression management (Agarwal, 2002) Disclosures relating to noteworthy events, balances and transactions The impression can be traced at a glance by critical close look at the earning managements and impression management that are released earlier. Most managers tend to release the organization financial information by the use of the third quarter earnings of the organizational report. The study induces more literature as it constantly deals with the releases of Hong Kong Accounting Standard (HKAS) 1 (Revised). Previous analyses prove the application of manipulation practices in the press release data. The results this ends up affecting the stock markets shares prices (Financial Management Association, 1972) Auditors’ remuneration The disclosure requirement where the issuers are expected by the line 2(h) in the Board’s main rules to give full information on the auditors and non auditors salary included in the corporate government report. The issuers’ failure to disclose the characteristics of non-audit assignments
Financial Reporting and Analysis for Decision Making Name Student ID Professor Course Date Introduction Financial reports integrates the use financial statements, stock exchange documentation to deliver the financial information required. The efficiency and effectiveness of financial reporting under the government of Hong Kong appears governed by; The Companies Ordinance (Chapter 32), the dominant sections appears as Sections 121-145 [Sections 373-446 working under the proposed companies Ordinance 2012]…
The financial ratios interpreted in this section include: all the liquidity ratios, some of profitability ratios (Return on equity and return on capital employed), gearing ratios, interest cover, and some of the investors ratio. Questions C and D have been answered in appendices 2 and 3 respectively.
Case 1(1) a) Financial statements information helps the users such as investors, creditors, regulators, and government, to make business and economic decisions. These financial statements should thus report an economic activity without exaggerating it so that the behaviour towards one direction can be influenced towards one direction.
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.
Every enterprise, whether public or private, large or small, profit making or not is a financial concern. Most of its decisions involve finance. Success or failure of the decisions and hence the enterprise depends on the quality of its financial decisions.
Favourism on one party over the other which is intentional should not exist concerning the information on financial reports. The financial statements will henceforth, provide a balanced scorecard to all the parties I relation to the
It is known that financial statements offer comprehensive information on the reporting firm, which is useful to existing and potential stakeholders (Rudžionienė 2006, p. 52). This paper will discuss this
o support the International Accounting Standard Board through identifying the theories that will be used by it consistently when revising and developing IFRSs (International Financial Accounting Standard) (Rutherford, 2000). The conceptual framework seeks to ascertain that the
For that reason, any accounting conceptual framework, if properly adhered to, ought to reflect lists of qualitative characteristics that make sure financial reporting is provided to users with sufficient
The reaction towards the issues arising due to the defect in the conceptual framework is reactive in nature rather than proactive. Therefore the lack of proper and standard conceptual framework has increased the risk of inconsistency in the standard with each other and
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