...Week 1 Financial reporting and its analysis has an important role in the information intermediaries (auditors, press, financial analysts) and financial intermediaries (banks, insurance companies, mutual funds) functioning. Information intermediaries and financial intermediaries use the information from the financial reports to investigate the investment opportunities and find the “good” ones (Palepu, Healy & Peek, 2013). The “lemons” problem explains the problem in identifying the “good” and “bad” ideas being offered in the market (Holod & Peek, n.d.). The “bad” ideas are valued by investors at an average level, as they know that in the market there are both types of ideas. This approach, unfortunately, leads to less attractive conditions of financing to the owners of “good” ideas; the proportion of “bad” ideas increases. The identification of “good” investments can be performed by following the four steps (Palepu, Healy & Peek, 2013): * Business strategy analysis * Accounting analysis * Financial analysis * Prospective analysis All the above analysis get the information from the financial statements, publically data available, from business application context that consists of credit analysis, debt analysis, general business analysis and other details on corporate business (Palepu, Healy & Peek, 2013). The business strategy analysis is a tool to form the performance expectations using industry data and competitive strategy data. Accounting analysis assess...
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...Financial Reporting Research In many cases, a business is not successful without a well-organized financial branch of their company. Whether it is a small business and reporting is done by the owner or if it is a large business that has a financial department, a company needs to know if it is making a profit. Modern accounting is believed to have begun around 1494 A.D. Book keeping entered into the Unites States in late 19th century. The first accounting exam was held by and organization in 1896. Today, accounting is used throughout the world and business to communicate, buy, sell and barter with each other very frequently and therefore, International accounting principles have been developed for the entire globe (Csebfalvi, 2012). In today’s highly competitive business world the environment requires companies to create a business strategy that includes accounting. This portion of their business strategy will help them achieve their strategic goals for the organization. In 1973, the International Accounting Standings Committee came in to existence in order to establish new international standards. The International Accounting Standards Board is the committee responsible for developing International Financial Reporting Standards (Knowledge guide to international accounting standards). This firm ensures that businesses are applying these standards to their financial reports. The first recorded account of international accounting was an article by Lord Benson called The...
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...International Accounting: Assignment 4 Chapter 5: Reporting and Disclosure Strayer University What is transparent reporting? Transparent reporting when speaking on financial statements means financials statements of high quality. These financial statements are clear, easily understood, frank and candid. Management makes decisions based on financial reports. So, it is the duty of the investor to understand the importance of transparent financial data when considering their choices. (http://ezinearticles.com/?Importance-Of-Transparency-In-Financial-Reporting&id=376424) Explain how transparent financial reporting (a) protects investors and (b) improves market quality. Investors face a fundamental problem when making decisions. Each one has to ask themselves two questions. 1. What return is to be expected from this investment? 2. How much risk will I incur? Any investor likes high returns, with minimal risk. If you can reduce an investor’s risk, then the company can acquire more capital at a much lower cost. However business is essentially risky. So how can risk be condensed for an investor? A method is to generate diverse types of investment securities (debt, preferred stock, and common stock, for example). But these securities do not get rid of business risk, they just alter it. When evaluating business threats and probable return, investors tackle an additional type of risk. This is a risk of the unknown. In the business world...
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...NiCE Working Paper 09-108 April 2009 Quality of Financial Reporting: measuring qualitative characteristics Ferdy van Beest Geert Braam Suzanne Boelens Nijmegen Center for Economics (NiCE) Institute for Management Research Radboud University Nijmegen P.O. Box 9108, 6500 HK Nijmegen, The Netherlands http://www.ru.nl/nice/workingpapers 1 Abstract We construct a compound measurement tool to comprehensively assess the quality of financial reporting in terms of the underlying fundamental qualitative characteristics (i.e. relevance and faithful representation) and the enhancing qualitative characteristics (i.e. understandability, comparability, verifiability and timeliness) as defined in ‘An improved Conceptual Framework for Financial Reporting’ of the FASB and the IASB (2008). The operationalization of these qualitative characteristics results in a 21-item index. Using 231 annual reports from companies listed at US, UK, and Dutch stock markets in 2005 and 2007, we test our compound measurement tool on internal validity, inter-rater reliability (Krippendorff’s alpha) and internal consistency (Cronbach’s alpha). Our findings suggest that the measurement tool used in this study is a valid and reliable approach to assess the quality of financial reports. The measurement tool contributes to improving the quality assessment of financial reporting information, fulfilling a request from both the FASB and the IASB (2008) to make the qualitative characteristics operationally...
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...Accounting Reporting Criteria The world of accounting can look quite universal to any outsider. Most people assume that when you are dealing with money and business that everyone follows the same standards regardless of where the company is located. This is not the case when dealing with companies in different companies that do not utilize the US GAAP. While there are some aspects that may be similar there are many differences between these types of companies and how they perform different accounting transactions. Regulatory Environment The regulatory environments in the United States and the International business community have some very distinct differences that make them very unique. In the United States due to major corporate scandals that have occurred in the past, such as Enron, have brought about some major changes with regard to corporate governance. “The US Government passed the Sarbanes-Oxley Act of 2002 which, among other things, set out specific guidelines for the behavior of directors of boards and senior management” (2008,p.2). The Sarbanes-Oxley Act was created to set specific standards that all companies would have to abide by. This act also created an “oversight board titled the Public Accounting Oversight Board (PCAOB) was established to serve as a regulator of the accounting firms that audit public companies” (2008, p.2). The Security and Exchange Commission monitors the PCAOB and maintains changes and updates to the Sarbanes-Oxley Act. These boards...
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...Reporting Practices and Ethics Paper Ruby Anderson HCS/405 12/15/14 Jennifer Noren Reporting Practices and Ethics Paper Financial reporting practices and ethical Standards in health care Generally accepted accounting principles are shaped by economic and political forces. It follows increased world-wide integration of both markets and politics. Since most market and political forces are driven by reductions in communication and information processing costs makes them remain local for foreseeable future thus making it unclear on how much coverage should actually occur. There is some evidence on which build an assessment of the advantages and disadvantages of uniform accounting rules within a country, let alone internationally. “A deeper concern is that there inevitably will be substantial differences among countries in implementation of IFRS, which now risk being concealed by a veneer of uniformity. The notion that uniform standards alone will produce uniform financial reporting seems naive” (Taylor and Francis online, 2006). Fraud and abuse in health care is unfortunate but also common. Although there is not a precise measure of fraud or abuse it does still exist and can cost tax payers billions of dollars while putting welfare and beneficiaries at risk. According to (Department of Health and Human Services, 2014) Medicare fraud and abuse increases the strain on the Medicare trust fund, where the impact of those losses and risks magnify as Medicare continues to grow...
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...Report on Disclosure of BASs & BFRSs By Golden Harvest Agro Industries Ltd. & Bangladesh Steel Re-Rolling Mills United International University QUEST FOR EXCELLENCE acade Report On: Golden Harvest Agro Industries Ltd. & Bangladesh Steel Re-Rolling Mills Limited Topic: Disclosure of BASs & BFRSs Course Title: Corporate Financial Reporting Course Code: AIS 4303 Submitted To: James Bakul Sarkar Assistant Professor & Deputy Director, BBA Program United International University Submitted By: Name | ID | Section | Fyaz Mahbub Rohan | 114 121 025 | A | Md. Ariful Islam | 114 121 045 | | Md. Hasan Alif | 114 121 091 | | Safayet Mustafa | 114 121 107 | | Ahmed Zubaier | 114 121 020 | | Anik Kumar Das | 114 121 064 | | Moniruzzaman Khan | 114 131 048 | | Date of Submission: 20th April 2016 Fyaz Mahbub Rohan (114 121 025): a. Front Page DesignContribution of Group Members b. Introduction c. Summary of BAS s & BFRSs d. Company Overview e. Disclosure of BAS s & BFRSs f. Conclusion g. Data Collection Md. Ariful Islam (114 121 045) a. Letter of Transmittal b. Executive Summary c. Introduction d. Summary of BAS s & BFRSs e. Disclosure of BAS s & BFRSs Md. Hasan Alif(114 121 091) a. Summary of BAS s & BFRSs b. Disclosure of BAS s & BFRSs c...
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...Financial Reporting Timeline The creation of: 1. Committee on Accounting Procedures Role - With the recent increase in members, the SEC delegated the responsibility of issuing pronouncements on accounting principles to the Committee. The SEC worked with the Committee on Accounting Procedures to develop standards for accounting and financial reporting and issued 51 Accounting Research Bulletins (ARBs) over its lifetime. In 1949, they updated 42 of their original ARBs and codified them. a. History - In 1933, the Special Committee on Development of Accounting Principles was formed by the AICPA. Quite simply, this committee did not get much done and was replaced by the Committee on Account Procedures in 1936. For the first two years, this committee also made very little progress. In 1938, the Securities and Exchange Commission issued Accounting Series Release No. 4 which asserted that any financial statements prepared in accordance with principles that had no substantial authoritative support would be considered inaccurate. This prompted the CAP to expand from 7 members to 21 members and increased its activity. b. Structure – The Committee on Accounting Procedures was committee formed by the American Institute of Accountants after the SEC delegated to it the responsibility of issuing pronouncements on accounting principles without government council. Initially, the CAP wanted to create guidance for solving accounting problems, but did not believe they had enough...
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...Over the past decade, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) have been working together to form a set of global standards. They are trying to make the International Financial Reporting Standards the globally accepted financial reporting principles. 1. As an international manager or investor, what benefits do you see from the growing adoption of IFRS across countries? Growing the adoption of IFRS across countries will allow for more comparable financial statements and disclosures globally. Investors and other financial statement users will be able to see how international companies compare to one another. Currently, U.S. Generally Accepted Accounting Principles (GAAP) varies from IFRS in many ways, some causing significant differences in accounting for certain topics. Growing the adoption will also allow companies and all its subsidiaries to use the same set of standards. 2. In your mind, what are the three most substantial challenges to the growth and development of IFRS in the coming years? Why? The three most substantial challenges to the growth and development of IFRS in the coming years are “convergence” or full adoption of IFRS, large costs of adopting IFRS, and the disagreement with the EU. Convincing all nations to adopt IFRS as is, with no specific national standards stepping in, is going to be a difficult process. “Convergence is an impossible dream. You will always find issues where you basically...
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...Financial Accounting and Reporting March 2015 Maldives Business School Cover Page ASSIGNMENT BRIEF BTEC HND/Associate Degree in Business (Management/HR/Marketing) The student must fill the relevant parts of the following table. Student Date Student First Name Student Last Name ID Task No. submitted Date issued Mohamed 1 8th March 2015 Statement of authenticity I, the above named student, hereby confirm that this assignment is my own work and not copied or plagiarized. It has not previously been submitted as part of any assessment. All the sources, from which information has been obtained for this assignment, have been referenced in the Harvard format. I further confirm that I have read and understood the Maldives Business School rules and regulations about plagiarism and copying and agree to be bound by them. Assignment summary information Unit 10 Financial Accounting & Reporting Unit Assignment reference 1 Assignment type This is an individual assignment. Task Submit on Do on Task 1: LO1, LO3, LO4, M1, M2, D1, D2, D3: Report 11 April 2015 NA Task 2: LO2, M3: Class assessment NA 23 March 2015 An extension must be applied for in writing by individual students and will only be granted Extensions for valid reasons. Late submissions Late submissions will be marked for all grades but will incur a fine of MVR 500. Assessor(s): Internal verifier: Assessor(s) please fill the table below AFTER the evaluation. Assessment Feedback ...
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...FAC3703/101/3/2015 Tutorial letter 101/3/2015 Specific Financial Reporting FAC3703 Semesters 1 and 2 Department of Financial Accounting IMPORTANT INFORMATION: Please activate your myUnisa profile and myLife email address and ensure you have regular access to the myUnisa module site FAC3703 as well as to your group site. Note: This is an online module, and therefore your module is available on myUnisa. CONTENTS Page 1 INTRODUCTION ..........................................................................................................................4 2 FORMAT OF FAC3703 ................................................................................................................4 2.1 Fully online ...................................................................................................................................4 2.2 Printed materials...........................................................................................................................5 3 PURPOSE OF AND OUTCOMES FOR FAC3703........................................................................5 3.1 Purpose ........................................................................................................................................5 3.2 Outcomes .....................................................................................................................................6 4 LECTURERS AND CONTACT DETAILS .......
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...Reporting Practices and Ethics Tiffany L. Richardson HCS 405 July 18, 2011 Todd Brown Reporting Practices and Ethics Financial Management is a fundamental part to successful healthcare financial planning. Financial decisions are a necessary part of the day to day operations of any type or sized health care facility. These decisions are made in accordance with the facilities fiscal objectives and accounting practices. It is important that the individuals making these decisions follow proper reporting and ethical practices since these decisions affect the future of the entire facility. In order to make finical decisions it is important to understand generally accepted accounting principles, corporate compliance, ethics, fraud and abuse. Generally Accepted Accounting Principles Generally accepted accounting principles are guidelines, objectives and conventions that have been set up over time to dictate how financial statements are prepared and presented (FASAB, 2010). The GAAP includes standards, conventions and the rules in which the facilities accounting department following when summarizing reports and preparing financial statements (Baker & Baker, 2011). Third parties that use these financial reports must then rely on the information to be free from all prejudice and discrepancy without debate. If the information is false then the GAAP standards were not followed and the facility is not in compliance and therefore behaving unethically (All Business, 2011). Facilities...
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...FINANCIAL ACCOUNTING & REPORTING LECTURE 1: Link Between Business and Accounting Dr. Namasivayam Lecture 1 1 LEARNING OBJECTIVES 1. Define accounting & explain why accounting information is important. 2. Identify users of accounting information. 3. Explain the contents of the 3 basic financial statements. 3. Explain the relationship between accounting equation and the balance sheet. 5. Analyse business transactions using the accounting equation. Lecture 1 2 WHAT IS ACCOUNTING? It is the way business people set goals, measure results, evaluate performance, and communicate results to various users. Lecture 1 3 ACCOUNTING LINKS … Lecture 1 4 USERS OF ACCOUNTING INFORMATION • Managers • Potential buyers • Trade creditors • Employees • Customers • Tax inspectors • Business owners • Potential partners • Bank institutions • Competitors • Auditors • Society Lecture 1 5 SHORT EXERCISES You as user of accounting information: i. Identify several ways in which you currently use accounting information in your life as a student or individual. ii. Identify several situations in which you might be required to supply financial information about yourself to others. Lecture 1 6 FINANCIAL STATEMENTS A quantitative report which describes the financial health of a business. This includes: An Income Statement; A Balance Sheet; A Cash Flow Statement. Lecture 1 7 THE...
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...application * Reduction in risk * Strict rules that give clear guidelines and more accuracy * Requirements are set out in detail and compliance with the rules can be more easily monitored and enforced. Disavantanges of rules based approach * Can cause unnecessary complications * Confusion * Encourages financial engineering 2. Rules-based accounting adds unnecessary complexity, encourages financial engineering and does not necessarily lead to a ‘true and fair view’ or a ‘fair presentation’. Discuss Rules-based accounting has not worked in practice. The present U.S. system does not produce accurate reporting. This has made standards longer and complicated and has led to arbitrary criteria for accounting treatments that allows companies to structure transactions to circumvent unfavorable reporting . Lease accounting contains hundreds of pages of...
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...Scrutinizing segment reporting is not new. FASB 14, the statement that FASB 131 replaced, required that segments be reported on a geographic and industry basis, unfortunately FASB 14 was too vague and companies were able to get around it. Analysts complained that it allowed too many companies to consider themselves single-segment firms. A study by the Financial Accounting Standards Board of almost 7,000 public companies found that some 75 percent said they operated in only one industry segment during the 1985—1991 time frame [ (Reason, 2001) ]. Because many companies were not providing expected segment information, the FASB replaced FASB 14 with FASB131. Under FASB 131, segments are defined from a management perspective--how management organizes segments within the enterprise for making decisions and assessing performance [ (Albrecht & Chipalkatti, 1998) ]. Under FASB 131, the management approach to segment reporting requires that segment information must be consistent with a firm’s management or organizational approach. FASB 131 was established to help the SEC see how companies are managed through the eyes of the company management. This means that companies had to start reporting the same information that they use internally for evaluating segment performance and that is used in deciding how to allocate resources to segments [ (Alfonso, Hollie, & Yu, 2010) ]. FASB 131 establishes standards for the way that public business enterprises report information...
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