...already adopted IFRS. In 2-3 pages (12-pt type, double-spaced) answer the following questions: 1. Describe the process that your selected country went through to adopt IFRS, such as how long it took for the country to fully adopt IFRS. IFRS’s are a single set of accounting standards at a global level for all sectors. Accounting standards are trustworthy statements is the reflection of financial statements to be presented to the stakeholders . United kingdom has already adopted IFRS since 2005.I would be discussing on adoption of IFRS by United kingdom for this paper. The United Kingdom has already adopted IFRS for the consolidated financial statements of all companies whose securities trade in a regulated market” (EU Law).The IAS Regulation requires companies with securities either equity or debt acknowledged to trading on a regulated market of any member state of the European Union to use international accounting standards in preparing their consolidated financial statements. As a member state of the European Union, the United Kingdom is subject to IAS Regulation adopted by the European Union in 2002. The EU IAS Regulation requires application of IFRS adopted by the EU for the consolidated financial statements of European companies whose securities trade in a regulated securities market starting in 2005. In the United Kingdom, this would include the London Stock Exchange Main Market. Foreign companies whose “securities trade in a regulated market in the UK is required...
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...Bangladesh Securities and Exchange Commission (BSEC) The Bangladesh Securities and Exchange Commission (BSEC) was established on 8th June, 1993 as the regulator of the country’s capital market through enactment of the Securities and Exchange Commission Act 1993. Through an amendment of the Securities and Exchange Commission Act, 1993, on December 10, 2012, its name has been changed as Bangladesh Securities and Exchange Commission from previous Securities and Exchange Commission. The Commission consists of a Chairman and four Commissioners who are appointed for fulltime by the government for a period of four years and their appointment can be renewed only for further one term, but the condition is that age cannot exceed 65 in position during the tenure. The Chairman acts as the Chief Executive Officer (CEO) of the Commission. The Commission has overall responsibility to formulate securities legislation and to administer as well. The Commission is a statutory body and attached to the Ministry of Finance. Mission of the BSEC is to: Protect the interests of the investors in securities. Develop and maintain fair, transparent and efficient securities markets. Ensure proper issuance of securities and compliance with securities laws. Financial Accounting Standards Board (FASB) Since 1973, the Financial Accounting Standards Board (FASB) has been the designated organizations in the private sector for establishing standards of financial...
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...International Financial Reporting Standards Introduction: IFRS are a set of rules developed and issued by IASB (International Accounting Standards Board) which is an independent body based in London, England. These rules will apply uniformly to financial reporting by public entities worldwide. The adoption of IFRS is widespread around the world with 120 countries requiring public corporations to adapt IFRS. Accounting standards as we know are a modern development although its traces date back 500 years. They are very important in today’s world in which the ownership and control of firm are different. The Role of Accounting Standards: Accounting standards are very important for the smooth functioning of capital markets. The managers are better informed than outside parties about the data and performance of the firm. However the outside parties control the capital which they can provide to the firm provided they rest assured about the sound quality of financials of the firm so as to ensure the safety of their capital. The more the safety, the less will be the cost of capital to the firm as the creditors and third parties will demand less rate of return. So the managers need to adhere to accounting standards and get it audited by professional auditors so as to ensure the true and fair picture of business. Hence the accounting standards dictate the allocation of capital in complex capital markets and economies. Benefits of IFRS 3.1 Countries: Different accounting standards are adapted...
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...a. Financial process management and control is improved with automation. IFRS transition offers a classic opportunity to exploit the benefits of ERP. The inherent value of consolidated transaction management and reporting systems becomes clear in a financial data conversion process. The ledger and subledger systems (where core data resides and feeds the GAAP-based GL) are the sources of the data conversion process. In the same way that ERP efficiently consolidates large volumes of financial and operational data for management visibility and reporting, companies can leverage the ERP system to consolidate multi-GAAP reporting for IFRS conversion. b. Financial information management is improved with a streamlined global chart of accounts. Comprehensive financial data management that includes financial controls, transparent reporting, and audit and security management is embedded in ERP systems like Epicor. A globally standardized accounting regimen will reduce the time and resources required to provide manual conversions still seen today. Combined with the consolidated financial resources of ERP, a globally streamlined chart of accounts under IFRS c. Teams work together to efficiently achieve a common objective. Internal best practices developed over many years of project and program management are immediately valuable to the IFRS transition project. Costs escalate, time and again, when companies extensively outsource these competencies or abdicate internal program management...
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...on the first of January 1958 with 27 member countries. The EU is located primarily in Europe (European Union, 2013). France, Germany, Italy, Netherlands, Belgium and Luxembourg founded the Treaty of Rome in the year 1957 and established The European Economic Community. (The European Union, 2012) The European Union’s main aim was create a business environment that’s united by harmonizing taxes and laws of companies, to form incorporated capital markets and endorse openness between counties during good and labor transfer. (Aswathapa, 2010) EU Harmonizing efforts The European Union EU has worked to harmonize accounting standards within the EU by using two directives, which are the fourth Directive (1978) and the seventh Directive (1983) that were able to enforce laws. After applying the EU new accounting standards they decided in the year 1995 to transfer to international standards. Moreover, the transfer was done by following the IASC efforts. In the year 2000 the European Union requested all the companies to follow the IFRS standards when preparing consolidated statements. (Khan, 2008) The directives used by the EU were the most appropriate way to minimize the differences between the twelve European Union countries. According to Dedman (2010) “directives are legislative instruments from the commission to the member state “. According to the fourth and the seventh company laws applied by the EU, a synchronized basis of the accounting preparation is provided, where...
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...Standards (IFRS); in virtually 100 countries, 12,000 corporations have opted to follow IFRS. As this standard is becoming globally accepted, the United States has been compelled to cooperate with IFRS. To portray the challenges involved, one large United States company, Clark Corporation, will be explored. At the close of the 2010 financial year, Clark Corporation’s external auditors strongly recommended that they prepare its financial statements using IFRS by January 1, 2012. However, Clark Corporation will encounter various challenges in migrating from depreciating the building under GAAP to IFRS. The component depreciation method is defined as “a method of calculating depreciation where separate items of a building with different useful lives are depreciated on different schedules” (Financial Dictionary, 2011). Although there are many benefits of the IFRS depreciation method, there are also numerous challenges that Clark Corporation will face from the gaps between current accounting practices and the new reporting system. One internal control challenge in migrating from the U.S. GAAP depreciation method to the IFRS depreciation method is the incompatibility between the systems. There are various internal controls in the U.S. GAAP reporting system that must be altered for the new reporting system, IFRS. First, the preventative controls in the U.S. GAAP system are effective to restrict the user from performing unauthorized actions but it may not be effective in the IFRS information...
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...GAAP, SEC, FASB, IFRS, and SOX. All of these regulations and principles have a huge impact on how the accounting profession is run and how companies keep their records. Some help with the security of customers and books while others create standards and regulations. GAAP- Generally Accepted Accounting Principles Generally Accepted Accounting Principles or GAAP are all of the accounting principles and standards that most companies and states use to run and regulate their businesses. It is a general principle that all businesses can follow without many hiccups. The main purpose for GAAP is to organize all accounting records, organize information about a company, disclose information about a company that investors can use, and to create financial statements. There are 10 fundamental parts of GAAP that keep everything flowing smoothly. First is Economic Entity Assumption which allows a sole proprietorship to be split into owner and sole proprietorship in accounting but then get put together as one entity out of the accounting books. Next is Monetary Unit Assumption which makes it so the only transactions that can be recorded in the books are U.S....
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...AFX 5860 Assignment International Studies in Banking & Finance Visit 1: UN Food and Agricultural Organization [pic] Place: Rome Italy Brief Introduction: The Food and Agriculture Organizaiton of the United Nations (FAO) is a special agency of the United Nations that leads international efforts to defeat hunger. FAO acts as a forum where all nations meet equally to negotiate agreements and debate policy, it also a source of knowledge and information which help developed and developing countries in transition modernize and improve agriculture, forestry and fisheries practices and ensure good nutrition for all (FAO, 2010). Rome Italy is head quarters. It has 191 member states as well as Europe Union and the Faroe Islands, which are associated members (FAO, 2010). FAO is composed of 8 different departments, the meeting is conducted by finance division. Relevant Key Points & Issues The fist half of the presentation briefly introduced the FAO’s role as UN’s agency, its structure, business environment and management. FAO’s mandate is contribute to the growth of world economy and to increase the level of nutrition, with the mission of helping build a food secure world. In order to achieve such mandates, they involves 4 activities which are putting information within reach, sharing policy expertise, providing a meeting place for nations and bringing knowledge to the field. It used result- based management which is an approach that integrates strategy, people,...
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...IFRS, International Financial Reporting Standards, are a set of accounting guidelines and standards just like the GAAP (American Institute of Certified Public Accountants, 2012). This is the first thing that Marie Claveau needs to understand, since the firms will be expecting people who can help in the adoption of the new international accounting standards. The standards were established by the international accounting standards board to become the globally accepted standards for use in the preparation of financial statements, in public companies. It is supposed to be a set of standards that can be used globally for the public companies, as well as private companies willing to use them as their accounting standards. Currently, it has been adopted in as many as 120 countries all over the world, with an aim of having an accounting standard that is uniform and easy for global accounting purposes (American Institute of Certified Public Accountants, 2012). Unlike each country having its own accounting standards, IFRS seeks to standardize accounting standards across the whole globe for easy comparison of accounts especially now when countries can no longer be independently sufficient economically (Securities of Exchange Commission, 2011). Thus, having an accounting standard accepted globally makes it easy for large companies and corporations to have an easy time and efficient accounting policies within all its global subsidiaries. Considering that, these firms will be engaged in the...
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...organization is reporting under the IFRS standard while their branch in the United States is using US-GAAP. While the differences do not outweigh the similarities, GAAP and IFRS standards have caused some concerns in financial reporting. These concerns have led to the evaluation of these two reporting standards and the discussion on whether to move IFRS worldwide. This paper will outline a few of the differences between GAAP and IFRS as well as review the discussion of standardized reporting using IFRS. Introduction Historically, accounting and reporting standards in the United States have been set by the AICPA (American Institute of Certified Public Accounts) as laid out by the regulations set by the Securities and Exchange Commission (SEC). In 1973, the Financial Accounting Standards Board (FASB) was developed by the AICPA as a council for establishing standards for reporting for all United States companies. Under FASB, GAAP was reorganized into approximately 90 accounting standards offering concise methods to follow for financial reporting. This not only allowed for ease of access when reading US financials statements, but also allowed for comparison of documentation for investments, credits, and other financial decisions. On the other hand, the International Financial Reporting Standards (IFRS) were developed by the International Accounting Standards Board (IASB) based in London. Currently, about 120 nations require the use of IFRS for financial reporting by public companies...
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...GAAP or IFRS WHEN WILL WE CONVERT? Paris Williams 10/1/2013 The accounting profession is on the verge of one of the most significant changes since the 1930s. In the very near future there is a great possibility that the United States Generally Accepted Accounting Principles (GAAP), as it is known today, will be replaced by the global standards known as the International Financial Reporting Standards. This paper will provide a history of IFRS and discuss the time frame of the conversion, along with is effects on U.S in the accounting perspective. Over the past few years, much talk of U.S adopting the IFRS as the basis for accounting principles has circulated amongst the accounting and business world. Although many may resent the conversion from U.S Generally Accepted Accounting Principles (GAAP) to the London-based International Financial Reporting Standards (IFRS), the movement has already began. Plans for this movement have already been proposed and put into effect, project and trials are being observed, and results are soon to come as the SEC and others make their final decision. However, with such a complex transition one must propose many questions such as, how will the movement affect us? What are some of the advantages and disadvantages? How do we adjust, and what is the ultimate benefit and purpose of converting? GAAP and IFRS are two separate sets of accounting standards used in different countries of the world. Although they both have the same...
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...gross domestic product (GDP) of any economy and is a member of the International Financial Reporting Standards (IFRS) which is viewed as the standard for the global economy. The United States has also become committed to integrating into a global set of standards, vowing to join the IFRS which already oversees 12,000 companies in 100 countries. Several of my classmates believe that the having a global standard will create a transparent economy that could lead to an increase in investor confidence. While this is true, there will be not a global set of accounting standards in the next five years due to reluctance of the United States to join the IFRS, China’s standards that are similar to the IFRS but still different, and the current global economic downturn. One of the major obstacles to a global economy is the reluctance of the United States to join the IFRS. Behind the European Union the United States currently has the second largest GDP but as of 2013 is not part of the IFRS. Although the United States Securities and Exchange Commission (SEC) stated in a 2010 press release that, “a step toward achieving the goal of a single set of high-quality global accounting standards, the statement notes that the Commission continues to encourage the convergence of U.S. Generally Accepted Accounting Principles (U.S. GAAP) and International Financial Reporting Standards (IFRS) in order to narrow the differences between the two sets of standards” they remain uncommitted to joining. In...
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...seems to appreciate her concerns, Annie has asked you to help her prepare a report for her boss to examine and to use when he needs to explain the issues to the company’s clients. Annie has already located a number of popular press items that she will use to gain a general sense of where US GAAP and IFRS differ. However, she is concerned that she will need more direct information to provide to her employer in order to help him understand the issues at hand. She has examined a number of companies that report using IFRS, but is not sure how to use those reports to help her illustrate her concerns. She has asked you to help her prepare some information that she might use to help her boss better understand the impact on financial reports of using IFRS versus US GAAP. Given the importance of various ratios in financial ratios, you have decided to calculate several commonly used financial ratios using values taken from a company that prepares it financial reports using US GAAP and one that a company that prepares its reports using IFRS. To provide the comparison, your selected an IFRS filer that was listed in the US, so was required to provide a reconciliation from the IFRS income and stockholders equity to the US GAAP values, which will allow you to calculate ratios from the same company for the same time period using both US GAAP and...
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...is to view that the US GAAP should adopt IFRS. I will provide benefits and costs of the SEC's adoption of IFRS which I think will be a beneficial situation to corporations, investors and auditors. Although the SEC continue to support IFRS, it currently does not allow U.S public entities to use IFRS on our major stock exchange. The SEC has been reluctant to adopt IFRS standards for decades. The IFRS has been working with all countries to harmonize their standards. The goal is to use a single set of enforceable global accounting standards that will unify the reporting of corporations worldwide. The IFRS standards are principle based and simplified. This makes it easier to follow than that of US GAAP; therefore, IFRS is the more convenient choice and should be adopted. By adopting IFRS Corporations will be able to trade goods and services worldwide without local governmental pressure and rules. This will minimize transaction costs to US companies, which leads to lower prices, an increase in competition and highly satisfied customers. Businesses will be able to present financial statements on the same basis as their foreign competitors, which will increase comparability between the company’s financial positions. Another benefit for US Corporation doing business as many entities multinational is that it limits the reporting to IFRS, which will increase consistency and transparency in its reporting. By using IFRS to replace GAAP and IFRS, combined, however, people argue that the...
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...ENVIRONMENT Multiple Choice—Conceptual Answer No. Description d 1. Accounting characteristics. a 2. Nature of financial accounting. c 3. Definition of financial accounting. a 4. Financial reporting entity. d 5. Efficient use of resources. d 6. Capital allocation process. c 7. Assessing management stewardship. c 8. Objectives of financial reporting. a 9. Role of AcSB. c 10. Body responsible for setting GAAP. b 11. Preparation of biased information. d 12. Parties instrumental in development of reporting standards. d 13. Stakeholders in the financial reporting environment.. a 14. “Due process”. d 15. Causes of subprime lending crisis. d 16. Management bias. b 17. Adoption of IFRS. c 18. Role of OSC. d 19. Definition of GAAP. b 20. Changing nature of the economy. d 21. Exercise of professional judgement. c 22. Major factors in the reporting environment. a 23. Impact of technology on financial reporting. b 24. Nature of the “Balanced Scorecard”. a 25. Responsibility for financial statements. d 26. GAAP for private enterprises. d 27. Reporting principles b 28. SOX. a 29 AcSB’s standard setting process Exercises Item Description E1-30 Objectives of financial reporting. E1-31 Role of securities commissions and stock exchanges. E1-32 User needs. E1-33 Sources of GAAP. E1-34 Standard Setting. E1-35 Challenges facing financial reporting. E1-36 Stakeholders in the financial reporting environment. MULTIPLE...
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