Investigation Of International Financial -Myassignmenthelp.Com

Question: Discuss About The Investigation Suitable Of International Financial? Answer: Introduction The issue that has been presented in the question is that the Singapore Accounting Standards Council (ASC) announced that the Singapore-incorporated companies would be moving to a amended reporting framework in regards to the recording of the financial particulars that is similar to International Financial Reporting Standards for the financial years starting from 1st January 2018. The adoption of the IFRS has become an important step in the accounting world. The adoption has continued to grow from the financial year of 2005. The factors enhancing the implementation of the IFRS revolve around the facts that these accounting principles improve the quality of the financial statements, enhances the reliability, relevance and the comparability of the financial statements (Albaskri, 2015). However, there are certain areas that should be considered in determining the worthiness of the International Financial Reporting Standards. The particular way in which the International Financial Reporting Standards are applied differ from one country to another. This is primarily because the different countries have different regulations that may be adhered to while preparing the financial statements of the company. Thus, the major drawback of the accounting regulatory principles lies in the fact that the suitability of the IFRS is poor resulting in the corrupted organizations exploiting the financial position of the company by not representing the true and fair view of the company (Altarawneh, 2015). The second aspect of the regulatory principles that affect the integrity of the International Financial Reporting Standards is revenue recognition. The current standard of the Generally Accepted Accounting Principles reflect that the costs associated with the transactions will only be realized when the services have been delivered in real or the money in regards to the transaction has been received. This particular regulation has resulted in some of the software companies to prepare the contracts in a way that carve out and upgrade the prices separately along with the other services whose value is difficult to ascertain. This enable the companies to resolve the accounting problems but result in the manipulation of the accounting standards that influence the way in which business is done rather than focusing on the performance of the company, that is the primary motive behind the preparation of the accounting statements. The limitations of the revenue recognition system in regards to the implementation of the International Financial Reporting Standards have resulted in the companies to increasingly utilize the corrupted and unethical practices for the purpose of reporting the financial performance of the company. The multinational companies and firms that share a worldwide reputation can evidently support this fact (Dhankar, Chakladerb Guptac, 2015). These firms have stated the fact that the compliance with the traditional accounting guidelines established by the International Financial Reporting Standards have resulted in the measurement and the recognition of the revenues and the expenses that have restricted the scope in the true and fair view of the representation of the financial statements of the respective companies. However, the global standard setting body has acknowledged this particular problem and has brought about a change in the International Financial Reporting Standards and Generally Accepted Accounting Principles. The new accounting regulations will permit the companies to bundle the services and goods pertaining to the future, into contracts for the recognition of the revenue in the particular financial year that it is earned by the utilization of the estimations in regards to the future costs and revenues. However, it should be noted here that this particular change would not be able to eliminate the problems, completely. The estimation of the costs requires the executives of the company to exercise their judgment. This opens up the opportunity for the managers to make errors or commit fraudulent activities like making fake inclination in the annual reports of the companies that represent closure towards the achievement of the financial targets of the companies (Hitz, Kaumanns Lehman n, 2016). The unofficial measures that have been undertaken by the corporate entities for the treatment of the unofficial earnings like the financial component of Earnings before interest, taxes, depreciation and amortization. The drawbacks of the International Financial Reporting Standards have also resulted in the major discrepancies in the accounting statements of the respective organizations (K?l?a Uyarb, 2017). Another problem with the International Financial Reporting Standards is that the managers and the investors for the determination of the value of the assets of the firm do not properly utilize the fair value accounting principles. The fair value accounting standards also provide the required scope to the managers and other administrative executives of the firm to commit fraudulent activities like the understatement or the overstatement of the revenues or the losses for representing the desired image of the firm (K?l?a Uyarb, 2017). Therefore, it is evident that the principle-based financial statements are much more susceptible to fraud. However, the adoption of the new financial reporting framework by the Singapore-incorporated companies should aim to utilize the IFRS standards as the fundamental foundation for the establishment of the same (Samujh Devi, 2015). References Albaskri, I. K. (2015). The perception of accountants on IFRS adoption: Evidence from Libya (Doctoral dissertation, Universiti Utara Malaysia). Altarawneh, M. S. S. (2015). An Investigation into the Suitability of International Financial Reporting Standards for Small and Medium-sized Entities (IFRS for SMEs) in Jordan (Doctoral dissertation, Liverpool John Moores University). Dhankar, R. S., Chakladerb, B., Guptac, A. (2015). Implementing IFRS from the perspective of public sector banks in India. Hitz, J. M., Kaumanns, S., Lehmann, N. (2016). Identifying consequences of mandatory IFRS adoption: The role of selection effects. K?l?a, M., Uyarb, A. (2017). Adoption process of IFRS for SMEs in Turkey: Insights from academics and accountants. Accounting Management Information Systems/Contabilitate si Informatica de Gestiune, 16(2). Laswad, F., Redmayne, N. B. (2015). IPSAS or IFRS as the Framework for Public Sector Financial Reporting? New Zealand Preparers Perspectives. Australian Accounting Review, 25(2), 175-184. Samujh, H., Devi, S. S. (2015). Implementing IFRS for SMEs: Challenges for Developing Economies. International Journal of Management and Sustainability, 4(3), 39-59.