Accounting Standards And Financial Statements - 1881 Words

Introduction Every business has to prepare its financial statements for its investors and making its business decisions. Company’s financial conditions are of major concern to the investors and creditors. As capital providers they rely on the financial statement for safety and profitability of their investments. They are also interested in knowing where and for what purpose their money is being used. Financial statements present the financial health of the entity. What are Accounting Standards? A principle that guides and standardizes accounting principles. Accounting standards are necessary so that financial statements are meaningful across the world with wide variety of business, otherwise the accounting rules of different companies would make comparative analysis almost impossible. An accounting standard is a guideline for financial accounting, such as how a firm prepares and presents its business income and expense, assets and liabilities. Uk accounting standards are under institute of chartered accountants of England and wales (ICAEW). Financial reporting In UK is guided by a regulatory framework called UK GAAP (Generally accepted accounting principles) IFRSs (International financial reporting standards) are developed and issued by the IASB (International accounting standard board) Advantages of Accounting Standards †¢ It facilitates achieving harmonization of accounting practices across nations. †¢ It helps in reaching out to global investors. †¢ It helps in takingShow MoreRelatedFinancial Statements and Accounting Standards1216 Words   |  5 Pages | directors | | auditors | | | 6. The main functions of the Financial Reporting Council include: I. overseeing the process for the setting of accounting standards of the AASB II. determining the AASB’s broad strategic direction III. monitoring and reviewing the level of funding for the AASB IV. directing the AASB in relation to the development or making of a particular standard V. the power to veto a standard recommended by the AASB. | I, II, III and V only | | I, II, andRead MoreAccounting Standards And Financial Statements1081 Words   |  5 Pagespositive spin on the financial statements. Over the years, there was a need for improvements in financial reporting. In 1999, the Governmental Accounting Standards Board (GASB) issued Statement No. 34; which caused a major change in the reporting requirements of the government (Fischer, Cheng, Taylor, 2009). This also led to a very comprehensive accounting process. GASB 34 made big improvements in how the government views their financial statements. History The GASB released statement 34 in June 1999Read MoreRules Based Accounting Standards And The Decision Making For Accountants Facing Financial Statements Essay892 Words   |  4 PagesIntroduction Nowadays, with the position of accounting becoming higher, accountants should have enough professional abilities to solve problems or make decisions. In addition, high quality accountants must follow a set of guiding principles for preparing financial reports during their careers. Therefore, numerous principles and rules are significant when it comes to accounting. The External Reporting Board (XRB) which called the New Zealand Conceptual Framework (CF) provides the basic principlesRead MoreUniform accounting standards produce uniform financial reporting. Discuss and evaluate the above statement in the context of the International Financial Reporting Standards (IFRS)1064 Words   |  5 Pagesidentify what the phrases â€Å"accounting standards† and â€Å"financial reporting† refer to. Accounting standards refer to the accounting methods used in an accounting system like the IFRS. Financial reporting refers to the representation of financial information, in order to be uniform the financial reporting must be based on a fixed set of rules, invole complete objectivity and no bias. The IFRS (International financial reporting standards) has indeed helped the uniformity of financial reporting. However, inRead MoreThe Important of Keeping Financial Records with Accounting711 Words   |  3 PagesThe meaning and importance of the accounting Accounting by definition from Merriam-Webster dictionary is â€Å"the skill, system, or job of keeping the financial records of a business or a person† (A) or according to investopedia â€Å"the systematic and comprehensive recording of financial transactions pertaining to a business† (B). These two do not show though, how important the accounting is for the company and how strongly it can influence the firm’s position in the stock market and investors’ approachRead MorePurpose And Context Of International Financial Reporting1272 Words   |  6 Pages1.0 Purpose and context of International Financial Reporting 1.1 Description and Role of a Stock Exchange Companies issue share in the primary market through an initial public offering (IPO) in order to raise capital. The estimated value of the companies and number of shares issued determine the price of shares. Companies obtain the money from IPO and no longer receive any money in further trading activity while the shares will be traded in stock exchange market or secondary market. Investors buyRead MoreEvaluation And Disclosure Of Information Essay1674 Words   |  7 Pagesthe financial statements, the accompanying notes and accounting policies of MFT Ltd for the year 2014. This essay will pay specific interest to the application of the conceptual framework of accounting to the relevant Accounting Standards (NZ IAS 1, NZ IAS 7, NZ IAS 8 and NZ IAS 10). The report will comment on why it is essential to regulate external financial reporting by Mainfreight. The second part will discuss the role of conceptual framework to accounting standards in external financial reportingRead MoreSummar y of Research for Accounting Changes and Error Analysis1143 Words   |  5 PagesResearch for Accounting Changes and Error Analysis Companies have always faced issues of how to reflect changes in accounting methods and error corrections in financial statements. A change in accounting principle results when an entity adopts a generally accepted accounting principle different from the one it used previously (Hall 2007). A presumption exists that an accounting principle once adopted shall not be changed in accounting for events and transactions of a similar type (Financial AccountingRead MoreAccounting Regulatory Agencies1280 Words   |  6 PagesACCOUNTING REGULATORY AGENCIES Introduction Accounting standards are needed so that financial statements will fairly and consistently describe financial performance. Without standards, users of financial statements would need to learn the accounting rules of each company, and comparisons between companies would be difficult. Numerous accounting bodies govern the accounting environment and accommodate the success of a business. The four main financial governing bodies includeRead MoreThe Focus Of This Assignment Is To Understand Accounting1070 Words   |  5 Pagesis to understand accounting terms, importance of accounting and reporting and how accounting and reporting take place in the business entity. It is also aimed to find out the flow of accounting information from the beginning to the end. And to understand accounting standards and principles. Accounting can be defined as a systematic process of identifying, recording, measuring, classifying, verifying, summarizing, interpreting and communicating financial information. Accounting reveals profit or