Accounting Theories and Current Issues

Running head: ACCOUNTING THEORIES AND CURRENT ISSUES
Accounting Theories and Current Issues

ACCOUNTING THEORIES AND CURRENT ISSUES
Table of Contents
Abstract............................................................................................................................................3
Introduction......................................................................................................................................4
Discussion........................................................................................................................................5
1. Relevance of Conceptual Framework in Financial Reporting.................................................5
2. Compare and Contrast the Implementation of IFRSs in Australia and the United States.......6
i. Reasons for the National Accounting Body Adopting IFRSs and When It Was Adopted. .8
ii. Transitional Issues Faced..................................................................................................10
iii. What Challenges Were Faced By Reporting Entities upon Adopting IFRSs..................11
iv. What Were the Benefits of Adopting IFRSs by Reporting Entities?...............................12
v. Similarities and Differences in Adopting the IFRS by Australia and United States.........13
3. Based on your findings, do you think the adoption of IFRSs were successful in the two
countries? Explain your answer.................................................................................................14
4. Provide two recommendations to the national accounting setting bodies (incl. AASB) on
ways to ensure the IFRSs continue to be relevant to users’ needs and to all sectors of the
economy.....................................................................................................................................14
Conclusion.....................................................................................................................................14
Bibliography..................................................................................................................................18
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ACCOUNTING THEORIES AND CURRENT ISSUES
Abstract
The assignment has generally been created with the aim to gather knowledge on the effectiveness
of financial reporting for the Australia units which include Conceptual Framework and the
implementation of the International Financial Reporting Standards (IFRS). The paper deals with
the possibility of IFRS being adopted by different countries. The paper also compares and
contrasts the implementation of IFRSs in Australia and the United States. The analysis was
undertaken to find out the reasons behind following it and the benefits that are being gained
through this approach. The assignment even comprises the consequences and the problems that
are being faced by the user. This paper can thus prove to be helpful for those countries which are
willing to incorporate the IFRS approach for their accounting theories.
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ACCOUNTING THEORIES AND CURRENT ISSUES
Introduction
The International Accounting Standards Board (IASB) developed a conceptual framework
during 1989. It has been set up with the aim to regulate and manage not only the national but also
the international standard-setters. The main task of this conceptual framework was to set
standards, assist preparers and examine as well as regulate their formation, thereby dealing with
potentially identifiable issues. Many dedicated, cooperation units and standard-setting bodies
from all around the world were considered a part of the framework of International Standard-
Setting. The trustees of the committee were provided with certain rights such as to select the
associates of the IFRS Advisory Council, the IFRS Interpretations Committee, which was
previously known by the name of IFRIC and the IASB among others (Shodhganga, 2018).
The conceptual framework has been formed to set out the fundamental rules and regulations for
the purpose of financial reporting that can help in managing the creation of IFRS standards by
the board members. It also helps in ensuring that the standards are theoretically operated so that
they can be managed using a similar approach. This will further help in providing the lenders,
investors and creditors with useful and proper information. The conceptual framework can help
the company with the guidelines for developing the accounting policies in case IFRS Standard
proves to be of no use in any of the particular transactions of the business. It further encourages
the stakeholders to recognize and understand the standards in the long run (IFRS Foundation,
2017).
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