...story. All directors, both executive and non-executive, have a legal responsibility for preparing accounts and must not approve accounts unless they are satisfied that they give a true and fair view of the assets, liabilities, financial position and profit or loss. It is important not to underestimate your legal responsibility as a non-executive director to prepare accounts that give a true and fair view and that comply with the law and accounting standards. Following are the three issues in Financial Reporting which I consider are significant: 1. Going Concern - the continuing challenge The going concern assumption is a fundamental principle that underlies the preparation of the vast majority of financial reports. A company is a going concern when it is considered to be able to pay its debts as and when they are due, and continue in operation without any intention or necessity to liquidate or otherwise wind up its operations for at least the next 12 months. The continuing difficult economic conditions mean that the assumption that the business is a going concern may not be clear-cut in some cases and directors may need to make careful judgements relating to going concern. Directors need to ensure that it is reasonable for them to prepare the financial statements on a going concern basis. Where directors are aware, in making their going concern assessment, of material uncertainties relating to events or conditions that may cast significant doubt upon the company’s ability...
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...thousands of customers around the world including Wholesale Services, Energy Services and Global Services combing broadband and transportation services. It experienced a meteoric rise and has 22th rank in the fortune’s 100 best companies list in America in 2000. With the energy crisis in California, Enron dilemma was started due to poor handling of deregulation of energy by the company itself. It appears that the success of Enronwas just luck and it seems to have sunk into a financial predicament. The collapse of Enron after 2000, has called into question...
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...... ...…......13 MARKET BASED Price/ Earnings (P/E)................................................................................................................... 14 Earnings Yield............................................................................................................................. 14 Conclusion .................................................................................................................................. 14 References……………………………………………………………………………………….15 Appendix ......................................................................................................................................16 Executive Summary Analyzing and interpreting annual financial reports by using financial ratios to help...
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...Revenue Recognition Revenue from contract with customer EXECUTIVE SUMMARY Revenue Recognition is regarded as one of the most important topic in accounting. However, it is most difficult issues that standard setters and accountants must deal with regularly because the accounting standards and rules are changing all the time for improving the quality of accounting, which also explains why there are so many changes over these two decades on Australian Accounting policy. This report will focus on some accounting policies regarding to recognition of revenue from the contracts with customers, its history before the adoption of international financial reporting standards (IFRS). Also, current standards and the convergence between IFRS and US GAAP in future will be discussed. There are some drawbacks and ambiguity on the earlier accounting standard to recognize revenue, therefore it is understood that the international accounting standard board (IASB) and Financial Accounting Standard Board (FASB) are currently working on the policy relating to the recognizing revenue from the contracts with customers. They have decided that the ultimate goal of the convergence is a single set of high-quality, international accounting standards that both domestic and international companies can use. Once the convergence is bringing U.S. GAAP and IFRS closer together in a few years, Australian entities may be influenced by the new proposals. It would be a challenging task for companies because...
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...Assessment Task 1 – Issues in Financial Reporting Question 1 There are many potential benefits associated with the international standardisation of accounting standards. Firstly, the standardisation of accounting standards makes it easier for international investors to better understand, compare, and interpret the financial performance and position of companies from different countries that are in competition with each other or are operating within a similar industry. Greater comparability and analysis of information helps these international investors to make more efficient, educated and intelligent investment decisions, particularly when it comes to deciding between the alternative investments on offer, and helps them to take advantage of the risk reduction that is possible through international diversification. Secondly, the harmonisation of international accounting standards reduces barriers to capital inflows by helping companies raise capital in domestic as well as international markets. This is useful particularly for those companies that find it difficult to obtain the funding necessary for their long-term growth and expansion projects in their local economy due to a scarcity of resources. To overcome this problem, companies can have their securities listed on foreign stock exchanges and in doing so, be able to significantly expand their base of capital funding. Harmonisation makes this possible because investors as a result are better able to understand the status...
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...COMMENTARY A Framework for Financial Reporting Standards: Issues and a Suggested Model American Accounting Association’s Financial Accounting Standards Committee (AAA FASC) James A. Ohlson, Stephen Penman, Robert Bloomfield, Theodore E. Christensen, Robert Colson, Karim Jamal, Stephen Moehrle, Gary Previts, Thomas Stober, Shyam Sunder, and Ross L. Watts SYNOPSIS: This paper addresses the issues that confront the FASB and IASB in developing a new conceptual framework document. First, we suggest characteristics that a conceptual framework ought to exhibit. Most of these suggestions are based on our critique of the existing framework and the FASB-IASB work in progress. Second, we present a model framework that exhibits these characteristics. We emphasize up front that this framework is quite explicit. It goes to the heart of what a framework document should do: it places specific restrictions on what constitutes admissible accounting standards. The purpose of our effort is to stimulate broad discussion of alternative approaches to foundational documents and to offer a specific example of such an alternative approach. Keywords: FASB; IASB; conceptual framework; accounting standards; financial reporting. JEL Classifications: M40. In 2008, the American Accounting Association’s Executive Committee asked the Financial Accounting Standards Committee ͑hereafter, the Committee͒ to develop alternative approaches to conceptual frameworks for financial reporting standards. The...
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...With the spate of recent corporate failures there have been increased criticisms and calls for regulatory reform of existing accounting and auditing practices. The issue of regulation within the accounting profession has been highly contentious and led to many debates. Those in favour of a free-market stress that market forces will optimise the allocation of resources and as such regulation is not necessary. Whilst those opposing this view believe that markets are imperfect and as such outside intervention in the form of regulation is required. Both sides hold valid arguments as to why regulation is or is not necessary and this paper shall examine these opposing views before providing an informed opinion. The anti-regulation or free-market approach to accounting is one that has been subscribed to for many years. The main thrust of the American Institute of Accountants in 1934 was anti-regulation, they stressed that, “no attempt [should be made] to restrict the rights of corporations to select detailed methods of accounting deemed by them to be best adapted to the requirements of their business” (May 1934, 80). The argument behind this notion is that the natural market forces or the “invisible hand” of the market will ensure self-regulation. Ross (1979, 379) implies this when he writes, “…disclosure regulations are generally neither required nor desirable, since left on their own, firms will have incentives to report accurately”. The belief that firms have internal incentives...
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...to Ely (2008), “financial regulation is a form of supervision, which subjects financial institutions to certain requirements, restrictions and guidelines, aiming to maintain the integrity of the financial system. The regulatory body may be handled by either a government or non-government organization”. The Jamaican financial landscape consists of various financial institutions. These include banks, security brokers, pension schemes and insurance companies. The main objectives of the financial regulator are usually: • Market confidence – to maintain confidence in the financial system • Financial stability – contributing to the protection and enhancement of stability of the financial system • Consumers’ protection – securing the appropriate degree of protection for consumers. • Reduction of financial crime – reducing the extent to which it is possible for a regulated business to be used for a purpose connected with financial crime. With the objectives being outlined, the Bank of Jamaica is the Central Bank of Jamaica that carries out the government’s financial regulation and supervision pertaining to all banks’ operations. The Bank of Jamaica, established by the Bank of Jamaica Law (1960), began operations in May 1961. The establishment of the Central Bank was in recognition of the need for an appropriately regulated financial structure to encourage the economy’s development process after independence. Although the Bank of Jamaica carries out the financial regulation of the...
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...Midterm review 1. Main sources of regulation of financial reporting 1. Government Regulation (true and fair; corporation act 2001) 2. ASX Listing Rules (firms on exchange) 3. Accounting standards (prepared by AASB) 2. International convergence: develop new or revise International harmonization: Australia accounting standards apply the international standard-setting bodies Adoption by Australia of international accounting standards by 1 January 2005 3. Aust standards are set for all reporting entities, but IFRS are primarily designed for large corporations 4. Objective of financial reporting Provide information to users that is useful for making and evaluating decisions about the allocation of scarce resources 5. Measurement of comprehensive income Income Less: Expenses = Profit or loss for the period +/- Items of other comprehensive income =Total comprehensive income for the period 6. Other comprehensive income Changes in asset revaluation surplus, actuarial gains and losses on defined benefit superannuation plans, gains and losses arising from translating the financial statements of a foreign operation, gains and losses on remeasuring available-for-sale financial assets, effective portion of gains and losses on hedging instruments in a cash flow hedge 7. The face of the statement of comprehensive income must include amounts for: -Revenue -Finance costs -Equity accounted share of profit or loss of associates [covered in ACCT6010] -Tax expense -Profit or...
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...1 Issues in Financial Reporting The path to knowledge cannot be found without visions and an overall picture. ± R. Mattessich oday's dynamic business environment is heralding a revolution in the need for, and the way in which, accounting data is utilized. This has resulted in talk of `an accounting revolution' (Beaver, 1998) and the possible `rede®nition of accountancy' (Elliott, 1998: 7). However, it is all too easy to become caught up in this stampede for change, but how far can accounting change and for it still to be called accounting? This chapter seeks to explore the major issues facing contemporary ®nancial reporting ± this will include its interrelationship with external auditing and the provision of assurance to those outside the reporting entity. After all, `[e]ffective reporting and accounting, and external scrutiny from auditors, are essential for effective corporate governance' (Company Law Review Steering Committee, 2001: para. 8.1). To understand the ®nancial statements, one needs to appreciate the auditors' work and opinion, and, conversely, to understand the auditors' work and opinion, it is necessary to appreciate the scope and limitations of the ®nancial statements. All too often, ®nancial reporting and external auditing are treated and discussed in isolation despite being inextricably linked. However, the ®nal ®gures in the ®nancial statements may come about as a result of negotiations between management and their auditors ± with the auditors examining...
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...hundred years, first appearing around the 1880’s (1). Since its creation however, goodwill accounting has been a source of debate and controversy due to its adverse effects on the net income of numerous firms. Goodwill accounting has undergone recent revision by the FASB, specifically in the area of goodwill impairment. The purpose of this paper is to examine the history of goodwill accounting, the initial amortization method and revised current method of testing for impairment, and the needed, yet sometimes detrimental effects this accounting has had on several high-tech industrial firms. Without proper accounting for goodwill impairment, several firms would have the ability to overstate their net earnings and destroy the reliability of the financial statements in the eyes of investors. To understand the history and need for goodwill accounting and impairment, one must start with a definition of the concept. According to the Intermediate Accounting text by Stice, “goodwill is best thought of as a residual amount, the amount of the purchase prices of a business that is left over after all other tangible and...
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...Blair, Lauri Journal #3 African-American Consumers and the Economic March 30, 2010 202-07 Dr.Ferdnance 1) Create a detailed consumer profile of the average African-American household. Find the average income, wealth, and primary purchases of the African-American household. Compare and contrast the consumption pattern of the African-American with European, Asian, and Hispanic Americans. African-American household Average income- $37,150 Wealth- $6,000 White Household Average income- $55,463 Wealth- $88,000 Comparing African American households to European, Asian and Hispanic Americans, African Americans have the lowest income. Second of all, in response to a lower income theoretically one would think that African Americans would save more and spend less and begin to invest, yet in response to poor financially education, and decisions African Americans spend more than any other race on materialistic things. African Americans spend a large amount and above any other races median in clothing, video game hardware, pc software and shoes. African Americans have been found to be very brand loyal to body soap, sneakers, potato chips, soda, hair products, and cookies and nail polish. African-American/Black Market profile found that African Americans are very persuaded through marketing, such as commercials, music videos, radios, and locals ads to buying cars, car accessories, communication gadgets and cosmetic products, and theses products are not being differentiated...
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...CREATING SHARED VALUE BUSINESS POLICY ASSIGNMENT - 2 Executive Summary Creating Shared Value - Reinventing Capitalism By Michael Porter & Mark Kramer According to Michael Porter and Mark Kramer, "Creating Shared Value" can be defined as Policies and operating practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in the communities in which it operates. The concept of shared value which focuses on the connections between societal and economic progress has the power to unleash the next wave of global growth. Shared value involves creating economic value in a way that also creates value for society by addressing its needs and challenges. The purpose of the corporation must be redefined as creating shared value, not just profit per se. This will drive the next wave of innovation and productivity growth in the global economy. Moving Beyond Trade‐Offs Solving social problems has been ceded to governments and to NGOs. Corporate responsibilities programs a reaction to external pressure have emerged largely to improve firms’ reputations and are treated as a necessary expense. Fair trade aims to increase the proportion of revenue that goes to poor farmers by paying them higher prices for the same crops. Though this may be a noble sentiment, fair trade is mostly about redistribution rather than expanding the overall amount of value created. The Roots of Shared Value A business needs a successful community...
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...An Internship Report On Audit Procedure of UHY Syful Shamsul Alam & Co. and A Comparative Analysis on IFRS (IAS) and AAOIFI on Financial Reporting Issues Department of Finance Faculty of Business Studies University of Dhaka An Internship Report On Audit Procedure of UHY Syful Shamsul Alam & Co. and A Comparative Analysis on IFRS (IAS) and AAOIFI on Financial Reporting Issues (As partial fulfillment of BBA Program) Submitted To Department of Finance University of Dhaka Supervised By Taher Jamil Lecturer Department of Finance University of Dhaka Submitted By Md. Rased Mosarraf ID: 16-062 Department of Finance University of Dhaka Date of Submission: May 22, 2014. Letter of Transmittal May 22, 2014. Taher Jamil Lecturer Department of Finance University of Dhaka Subject: Submission of internship report. Dear Sir, I have the pleasure to submit an Internship Report after completing a successful three month Internship attachment at a CA firm named “UHY Syful Shamsul Alam & Co.” on “Audit Procedure of UHY Syful Shamsul Alam& Co. and A Comparative Analysis on IFRS (IAS) and AAOIFI on Financial Reporting Issues”. I have concentrated my best effort to achieve the objectives of the report and hope that my endeavor will serve the purpose. The practical knowledge and experience gathered during report preparation will immeasurably help in my future professional life. I will be obliged if you kindly approved this endeavor...
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...“Problems to solve by lucy kellaway & the Financial Times” Do I have to invite co-workers to my wedding? This is a very interesting question. When you see it if no one asks you to think about it one is likely to think “what a stupid question, that has an obvious answer”, but you would be wrong. A person that works in a company will most likely spend more time there then at home. It shouldn't be to much of a predicament if the person holding the wedding gets is friends with everyone at work, which might happen if you work for a small company, and the work space consists of a small work force. What if you don’t like some one in your work place? or even if one feels that the time they spend with their colleagues is more then enough? It really depends on the person who is about to take the ultimate step in a relationship. One can invite everyone and just have to deal with those who are not to their liking, which will prevent any future resentments. One can invite just the ones they get along with, this with the notion that others will find out about the happening, and might result in future quarrels in the future. A politically correct approach can be taken by not inviting their co-workers to the wedding using the expenses as an excuse. As a person that has never worked in an office environment, and hasn’t even pondered on the idea of getting engaged, it is hard to considered the approach that I would take. Based on school environment birthdays, I believe if I was eccomicly...
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