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Advanced Financial Accounting | Sample Assignment

   

Added on  2021-06-17

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Running head: ADVANCED FINANCIAL ACCOUNTINGAdvanced Financial AccountingName of the StudentName of the UniversityAuthor’s Note
Advanced Financial Accounting | Sample Assignment_1

1ADVANCED FINANCIAL ACCOUNTINGPart AFrom the provided situation, it can be observed that the financial statements of thebusiness organizations that have been developed as per the standards of IFRS have failed toprovide the users with the required information to analyze the financial performance as well asfinancial standings of those entities; but the companies have spent more than millions of dollarsfor the adoption of the standards of IFRS. Financial statements of the business entities fail toprovide the required information when they lack the qualitative characteristics of financialinformation, as per the accounting conceptual framework. The following discussion sheds lighton the qualitative characteristics missing from the IFRS financial accounts.Understandability and comparability are important qualitative characteristics of financialstatements. The first helps the users in gaining understanding about the financial statements andnoose to them and the later helps in comparing the financial information of one company to othercompanies. Here, Geoff Roberts has mentioned the fact that the fund managers and analysts havenot raised questions about the financial adjustments of IFRS financial statements as the largelydepend on the management briefing and investor’s report to understand the financialperformance and position of the business entities that shows the presence of both undesirabilityand comparability in the financial statements. Thus, the present financial reporting frameworkunder IFRS lacks these qualitative characteristics (Horton, Serafeim and Serafeim 2013).Apart from the above, the importance of verifiability as a qualitative characteristic offinancial reporting cannot be ignored as this qualitative characteristic helps the users of thefinancial statements to apply the knowledge and observation in order to gain understanding aboutthe financial performance and position of the entities. The statement of Terry Brown indicates
Advanced Financial Accounting | Sample Assignment_2

2ADVANCED FINANCIAL ACCOUNTINGtowards the fact that the notes to the financial statements developed as per IFRS can mislead thefinancial analysts in case they try to analyze them when they are not technically trained. Fromthis statement, it can be observed that there is a requirement of high technical knowledge for theanalysts for analyzing the financial notes developed as per IFRS standards as it will not bepossible to analyze them in the presence of limited technical knowledge. Hence, it can beconcluded that the presence financial reporting as per IFRS does not have verifiability qualitativecharacteristic (Christensen et al. 2015).Most importantly, relevance and faithful representation needs to be there in the financialstatements of the business entities as they are major qualitative characteristics. Relevance helpsthe financial information to make a positive different in the investment decision-making processof the investors where the later ensures that the users can obtain the correct information from thefinancial statements of the business organizations. The statement of David Craig indicatestowards the fact that the financial statements developed as per the standards of IFRS fails toprovide the correct relevant information about the financial performance and financial standingsof the companies and thus, the investors ignore these reports. Hence, from this discussion, it isclear that that the current financial reporting framework under IFRS lacks both relevance andfaithful representation (Horton, Serafeim and Serafeim 2013). Part BThe government of Australia took the decision of not introducing any regulation underthe Corporations Act for social and environmental responsibilities. The following theories helpthe analysis of this decision with the help of three major theories of regulations:
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