Importance of Financial Reporting Framework in Corporate Accounting

CORPORATE ACCOUNTING
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EXECUTIVE SUMMARY:
As all we know, financial statements are used by the users to take the decision for the various
purposes such as investment, exit from an organization, purchase or supply etc. If these
financial decisions are prepared voluntary, then it would not be useful to anyone. To
overcome this issue, the financial reporting framework came into effect. Financial Statements
prepared on these underlying rules become critical for the decision making. As such,
financial statements are useful only when they are prepared by following such underlying
standards.
There are some standards, which are considered as global accounting standards like GAAP,
IFRS, and IASB etc. These standards are not compatible with the organizations of each
country. Thus, these are adopted subject to some modifications.
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Contents
EXECUTIVE SUMMARY:.........................................................................................................................2
BRIEF:....................................................................................................................................................4
CORPORATE REGULATION:...................................................................................................................5
ACCOUNTING STANDARD SETTING:.....................................................................................................6
OWNER’S EQUITY..................................................................................................................................7
CONCLUSION:......................................................................................................................................11
REFERENCES:.......................................................................................................................................12
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BRIEF:
Nowadays, every organization prepared and presented its financial statements using the
underlying guidelines and standards. In this assignment, we will discuss the importance of
financial reporting framework in the preparation and presentation of the financial statement.
We will also discuss the fact that why the management should not prepare and present the
financial record of the company according to their own wish.
In addition to that, we will be discussing the role of the Australian Accounting Standard
Board (AASB) in the adoption of International Financial Reporting Framework (IFRS). We
will discuss that why countries adopted the GAAP, does not adopt the IFRS.
Our discussion also includes the four companies listed on ASX and analysis of factors
affecting change in the equity of these companies. Finally, we will be discussing on equity
and debt analysis of the company.
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