Financial Accounting Coursework Example | Topics and Well Written Essays - 2250 words

Financial Accounting - Coursework ExampleIt was also decided that the auditors would also have to bring home the bacon the International Standards of Auditing (ISA), so that it would be easier to decompose the financial statements of the company on a global platform. The purpose of this study is to discuss the improvement in the graphic symbol of information that users of financial statement get in IAS environment. Developing a strong account system is of significant importance because ability of the investors and the banks to calculate and prize the financial strengths and the performances of the companies depends on the transparent corporate accounting system. There should be mandatory consolidation of accounts along with the subsidiary accounts for ascertaining the true profitability. There was lack of segmented reporting of income, other disclosures, extent of deferred tax liabilities, and so on These were few reasons for which a common accounting standard was introduced. T he Regulatory Framework for Financial Reporting both the companies in UK have to comply with the company laws regardless of its size. It was also important for companies to develop financial statements for the investors to analyze the financial position of the company. It is also the legal responsibility of the directors to see that the company is working in conformism to the accounting standards. According to the Companies Act of 1985, companies must represent a true and fair view of their accounting statements. In 1990s, the Financial Reporting Council (FRC) was set up for setting the accounting standards in UK. It was a totally independent body set up by the Department of Trade and Industry (DTI) and the City institutions. In the year 2000, the International Organization of Securities Commissions (IOSCO) reviewed the IAS. It was proposed that all the EU companies would have to prepare their accounts or financial statements by following the IAS standards. It was estimated that about 7000 companies in EU were accountable for using IAS, whereas there were only 275 companies who were using IAS savings bank then. All the measures required were taken to establish IAS as a law in EU. This regulation was relevant for the detailed accounting provisions. It was on the member states to choose whether they wanted to permit their unlisted companies to follow the IAS standards. so far the UK Accounting Standard Board (ASB) did take several initiatives to narrow down the gap between IAS and chiefly Accepted Accounting Principles (GAAP). IAS is still being modified and it has become IASB in the process of converging IAS and GAAP. A survey was conducted by Pricewaterhouse Coopers in the year 2002 among 650 Chief Financial Officers (CFOs), all across the European conglutination to find the response of the companies towards the usage of IAS. It was found that 62 percent of the CFOs agreed to the fact that IAS would help in establishing an effective and transparent acco unting system for them. 85 percent of the companies still did not use IAS, 92 percent of the CFOs were confident of meeting their deadlines of 2005 and about 60 percent did not even begin their proviso for transition. International Accounting Standards (IAS) The study aims at discussing the different aspects of IAS, in order to analyze the improved quality of