How Financial Accounting Disclosures Can Be Improved

1. Introduction This report is written as a response to the monograph in which the ICAEW published on how financial accounting disclosures can be improved. The aim of this report is to critically discuss and evaluate the worthwhileness of the recommendations made from a financial investor’s perspective. It is done by reviewing recommendations put forward by the ICAEW and analysing if each of the disclosure recommended is worth the effort while putting in perspective what effects these recommendations have on professional investors who are one of the primary users and consumers of financial statements. The report contains information mainly from the ICAEW report and the CFA institute report The second section of this report looks at the first recommendation which suggests firms to report different set of accounting information for its different users. Professional investors are very critical of the two approaches put forward as they do not want exclusion on financial information. The third section of the report looks at the second recommendations on how auditors can play a significant role in encouraging firms to omit immaterial disclosures. Profession investor can rely on auditor’s notes on materiality of financial disclosures when making financial judgments however there are still questions on what is thought to be material. The final part of the report The justification for recommendation 4 being selected to review is because professional investors are concernedShow MoreRelatedAssignment 3 Accounting for Pensions and other Post Retirement Benefits1551 Words   |  7 Pages Assignment 3: Accounting for Pensions and other Post-Retirement Benefits ACC 563 – Advanced Accounting Theory Abstract This paper will be based research, compare and contrast the early historical accounting for Postretirement Health Care and Life Insurance Benefits with the guidance / rules in place today with the Financial Accounting Standards Board (FASB) recently issued Statement of Financial Accounting Standards No. 158 Employers Accounting for Defined BenefitRead MoreSarbanes Oxley Memo1410 Words   |  6 Pagesresponse to the high profile financial scandals, such as seen with Enron and WorldCom. The purpose of this act is to protect shareholders and the general public from accounting errors and fraudulent business practices. The Sarbanes-Oxley Act introduced stringent new rules to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws. Sarbanes-Oxley is not a set of business practices and does not specify how a business should store records;Read MoreEffects Of Accounting Standards Update ( Asu ) No1552 Words   |  7 PagesEff ects and Implications of Accounting Standards Update (ASU) No. 2014-08 on Financial Statement Presentation and Reporting The Financial Accounting Standard Board (FASB) was established in 1973 to guide nongovernmental entities in the presentation and reposting of financial statements. Their mission is to â€Å"establish and improve standards of financial accounting and reporting that foster financial reporting by nongovernmental entities that provides decision-useful information to investors and otherRead MoreConceptual Framework For Financial Reporting Essay1095 Words   |  5 PagesFramework for Financial Reporting 2 Objectives of General Purpose Financial Reports 2 Qualitative characteristics of useful financial information 2 Disclosure Requirements on PPE under AASB116 3 Telstra’s alignment with the disclosure requirements 3 Satisfying fundamental and enhancing qualitative characteristics 4 Satisfying the objectives of a general purpose financial report†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.................. 5 Bibliography†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦....... 6 Conceptual Framework for Financial Reporting ObjectiveRead MoreDo The Requirements Of Ifrs 8 Operating Segments Enhance Quality Of Information Available For Financial Statement Users?1744 Words   |  7 Pagesenhance the quality of information available to financial statement users? Introduction The IFRS 8 is an international accounting standard, which requires entity, adopt management method when report operating segments’ financial performance to made the segmental information closer to the internal report of the entity. The IASB has substituted IFRS 8 for IAS 14 and combined the segment report request with the SFAS 131 Disclosure about Segments of an Enterprise and RelatedRead More1 What Problems Did Enron EncounteredMany1303 Words   |  6 Pagesof investor and creditor trust Methods the company used to disclose (or creatively obscure) it’s complicated financial dealings were erroneous and, in the view of some, downright deceptive The company’s lack of transparency in reporting its financial affairs, followed by financial restatements disclosing billions of dollars of omitted liabilities and losses, contributed to its demise 2. How did the management react? Enron did not report debt on its balance sheet. Through collaboration with majorRead MoreFinancial Reporting And The International Accounting Standards Essay1993 Words   |  8 PagesIntroduction Purpose Complexity in financial reporting is apparent especially when applying it to relevant accounting theories. Complexity is the state of being difficult to understand and apply (SEC 2008, cited in Petersen, 2012). When we apply complexity to accounting we think of it in terms of applying it to accounting transactions which flow onto financial statements and how these were developed from the Accounting Standards. (Peterson, 2012, p.73). The purpose of this reportRead MoreInternational Accounting Standard Board ( Iasb )1454 Words   |  6 PagesInternational Accounting Standard Board (IASB) is a professional body that develops and approves International Financial Reporting Standards (IFRSs). The IASB is known as an independent and a private sector organizational. IASB was formed to replace the International Accounting Standard Committee. The IASB organization is responsible for all technical matters of the IFRS Foundation that includes ‘full discretion in developing and pursuing its technical agenda, subject to certain consultation requirementsRead MoreOff Balance Sheet Financing Practices1410 Words   |  6 PagesBalance Sheet Financing Practices [Student Name] [Course Title] [Instructor Name] [Date] Off Balance Sheet Financing Practices The traditional accounting methods have been replaced by a number of new accounting techniques. Some of which are observable while other remain hidden. Off Balance Sheet Financing or OBSF is one of these new accounting techniques. It is a mode of obtaining finance for a business without disclosing significant capital expenditures on the balance sheet of a company byRead MoreSarbanes Oxley Act Of 2002 Essay1380 Words   |  6 PagesSarbanes-Oxley Act is an accounting and business related law that was put into place to help boost confidence in financial accounting and financial markets (US Sarbanes Oxley Act). Some of its key provisions are that it requires the CEO and CFO to personally sign off on all financial statements, increases penalties for those who violate the act, and it protects whistleblowers (SOX 2002). Clearly, Sarbanes-Oxley can improve ethics in financial reporting and the purpose of this paper is to show how. A number of