Comparative Financial Reporting Essay Example | Topics and Well Written Essays - 3000 words

Comparative pecuniary Reporting - assay ExampleMaterial misstatements are misstatements that can affect users decisions on the financial statements of a company. The auditor may either issue an unmodified opinion (when the financial statements are non materially misstated or a modified opinion (when the financial statements are materially misstated). (McMeeking, 2006). This paper examines contemporary issues between International Financial Reporting IFRS and the Generally Accepted Accounting Principles GAAP.The IASB / FASB project on revising the conceptual Framework has upstage substance over underframe. (IASB / FASB May 2008, Exposure Draft, Conceptual framework for Financial Reporting ) . The explanation is BC2.19. The Boards think that faithful representation means that financial reporting information represent the substance of an economic phenomenon or else than solely its legal form. To represent legal form that differs from the economic substance of the underlying econ omic phenomenon could not result in a faithful representation. Accordingly, the proposed framework does not identify substance over form as a component of faithful representation because to do so would be redundant.However, the fair care for view assumes that market are relatively perfect and complete and that in such a scene financial reports should satisfy both the interest of passive investors and creditors by stating a true value derived from the current market prices. An alternative view to this doctrine assumes that markets are imperfect and incomplete and that in such a market commemoratetings, monitoring requirements of shareholders should be catered for. To conclude therefore, in the words of Whittington (2007), the practical supports of two views is unrealistic as in a realistic market siteting the search for a universal measurement mode may be fruitless. According to Whittington (2007), a much appropriate approach to the measurement problem superpower be to define a clear measurement objective and to select the measurement that best picture the objective.1. 2.0 Identify and comment on what you regard as the 4 most significant accounting polity differences between IFRSs and US GAAP (200 words)International Accounting Standards (IAS/IFRS) are a point of accounting standards exclaim by the International Accounting Standards committee (IASC) and intended to be used as a theme for cross-border capital raising and listing in global financial markets. (Asbaugh, 2001). The main goal of the International set of Accounting Standards is to standardise the financial and accounting method disclosures of firms in different nations. That is, if firms follow the same set of accounting standards, their external financial reports will provide more uniform disclosures and thus investors would make more use of the variables inherent in the financial statements. (Asbaugh, 2001). Also, firms and investors would benefit from financial statements prepared fol lowing an international set of accounting standards. (Asbaugh, 2001).In meeting with the above objectives, the European Union issued regulation 1606/2002 of July 19, 2002 requiring that all companies listed in the European Union and European listed companies in other countries to adopt international accounting standards in their Financial statements from first January 2005 onwards. The regulation also gave member states the