Advanced Financial Accounting - Sample Assignment
Added on 2021-06-14
12 Pages2872 Words29 Views
Advanced Financial Accounting1Advanced Financial AccountingStudent’s nameUniversity NameAuthor’s Name
Advanced Financial Accounting2Table of ContentsPart 1..........................................................................................................................................31. Relevancy...........................................................................................................................32. Comparability.....................................................................................................................33. Faithful Representation......................................................................................................34. Timeliness...........................................................................................................................35. Prominence.........................................................................................................................4Part 2..........................................................................................................................................4The Theory of Public Interest.................................................................................................4The Capture Theory................................................................................................................6Economic Interest group theory of regulation........................................................................7Part 3..........................................................................................................................................7Part 4..........................................................................................................................................8Part 1.......................................................................................................................................8Idea behind non-revaluation of the assets...........................................................................8Liquidity of the asset value.................................................................................................9Part B......................................................................................................................................9Impact of the decision of not revaluating the assets in the financial accounts...................9Part C....................................................................................................................................10Impact of wealth on stakeholders.....................................................................................10Reference List..........................................................................................................................11
Advanced Financial Accounting3Part 1The article “Unwieldy rules useless for investors” focuses on criticising the standards offinancial accounting as well as IFRS also. There are several evident factors behind thiscriticism. In financial reporting, there are various key factors. They are:Putting in useful and relevant data that aids in taking investment decisions. These decision also directly influences the assessment of pro forma cash flows.Any transitions in the structure of business might also be assessedThe conceptual framework incorporates the following qualitative characteristics:1. RelevancyRelevant and appropriate information that might help to influence the investmentdecisions of major investors is of primary importance in financial reporting (Acharya andRyan, 2016). 2. ComparabilityThe information provided, should be comparable in context of similar entities in lieu of thesame Fiscal Year (Ang, 2018). Hence, the characteristics might be u8seful for investors torealise the likeliness and unlikeliness within various items.3. Faithful RepresentationIt is immensely necessary to provide correct information of the financial statements to thestakeholders. The faithfulness of the information is based upon the inherent qualities likecompleteness, neutrality or error-free. Other than that, judgement making should duringuncertainty should be prudent (Berry, 2015).
Advanced Financial Accounting44. TimelinessThe provided information should be readily available and promptly on time. This wouldprove to be useful for investors as they would be able to take relevant and timely decisionswith the help of these information. 5. ProminenceIn order to help the users to understand the information, it needs to be prominent. None if theinformation should be misleading. Otherwise, the financial reporting would be blind eyed. Nevertheless, in the article under consideration, listed individuals informed that somespecific qualitative features pertaining to financial reporting are not be met by the currentlyemployed reporting procedures pursued by the IFRS. As per this article, the adjustmentsincorporated by the IFRS, are irrelevant, and also do not fulfil the criteria of faithfulnesscorrectness (Bhaktavatchalam & Somasekhara, 2017). Hence, the investors might be misledas a result of such fraudulent financial reporting. Other than that the investors are facingissues while comparing various companies while making investments, owing to themisleading data and statistics of the financial accounts. Moreover, these views also imply that corporate financial reporting satisfies theprimary goal of financial reporting as evident in Conceptual Framework. The prime motive offinancial reports is providing relevant information about the assets, expenses and equity ofthe organisation in focus to the stakeholders (both internal and external) (Bonsall et al. 2017).Corporate Finance reports requires to meet all of the above stated requirements according tothe characteristics detailed in the Conceptual Framework. This is necessary for meeting thecriteria of the stakeholders to whom the financial statements may concern.Part 2
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