The tasks in making the financial statement are becoming more and more complicated because of the changes in the disclosure and regulatory requirements. According to the Association of Chartered Certified Accountants (ACCA) (2009), the interest on such regulation has given much attention because of the impact of the financial crisis, issues of accuracy and the increasing number of business and stakeholders today. If the increase of regulatory requirement is a meaningful improvement, then understanding on some of its aspects should be enumerated to see if the regulations have contributed to the problems, and whether companies and financial institutions could have acted more responsibly.
Thus this paper will give focus on whether standards are really necessary in the preparation of financial statements. It will also consider the question if the governing regulations are too much to be implemented. And lastly, whether the company is using the improved or the traditional way, the advantage and disadvantages will be tackled.
The International Accounting Standards Board (IASB) has drawn up and published a new set of accounting standards called the International Financial Reporting Standards (IFRS) which are now applied globally (Weets, n.d., p. 1). According to the International Accounting Standards Board (2007, p. 28), IFRS is developed by an open public observation that involves accountants and different financial statement users around the world. IFRS development and interpretations are all through an international due process. Authorities are establishing this heavy-handed and more complex approach because of the recent failures of regulation. Many countries including the 9,000 public companies in European Union, Middle East, Russia, China, Japan and Australia believe that this new regulation is the appropriate solution