Financial Reporting in Global Market

Financial Reporting in
Global Market

INTRODUCTION...........................................................................................................................................4
TASK 1..........................................................................................................................................................4
P1 Regulatory frameworks and governance of financial accounting:......................................................4
Governance of financial reporting...........................................................................................................6
P2 Purpose of financial reporting for meeting organisational objectives, development and growth:.......7
P3 Interpretation of profit & loss, balance sheet and cash flows..............................................................9
P5 Benefits of International Accounting Standards (IAS) and International Financial Reporting
Standards (IFRS)...................................................................................................................................12
P6 Models of financial reporting and auditing.......................................................................................14
P7 Critically evaluate the differences and importance of IFRS in different countries............................15
Factors influence the international differences in financial reporting....................................................16
Models of financial reporting and auditing............................................................................................16
CONCLUSION.............................................................................................................................................16
REFERENCES..............................................................................................................................................17

INTRODUCTION
Financial reporting can be considered as a system of displaying to employees and senior
interested parties the financial reports and details. The primary function of these documents is to
raise awareness among citizens about a corporation’s financial over a given time period. There
are a large variety of decisions and processes produced by various agencies in the context of the
organization (Aifuwa and Embele, 2019). Awareness of the results of all the operations in terms
of benefit is important here and that this is achieved with the aid of annual disclosures. The
annual reports are finally drawn up and published at the end of each accounting period. This
report based on the Tesco Company which is established in UK and large sector organisation.
Now this Financial Reports report format, conceptual and regulatory structure is described.
Including the advantage of those findings to the stockholder is also addressed. In addition to this,
the report contains variations between the international accounting standard and the international
financial reporting requirement. From the background of provided details and data, various types
of financial reports and statements, including such P&L account, balance sheet etc. are prepared.
TASK 1
P1 Regulatory frameworks and governance of financial accounting:
Financial reporting: This includes the submission to the managers and the holders i.e. the
investors of the company’s financial statements for the purpose of obtaining information the
financial condition of the corporation. It is the assessment of audited financial statements in an
organization that consists mainly of statement of revenue &spending, report of financial position
and income statement. It is a legal duty for the company to report to its creditors and
stakeholders and what overall monetary condition is. The institution's compliance with financial
reporting guarantees that perhaps the interested parties, most pertinently the stockholders, are
cared for properly of their investments. This is an integral part of effective financial regulation.
Government and political review of accurate financial reports helps companies develop an
enforcement relationship together with consumer dependency. That is accompanied by the core
objective of financial reporting:
1. Reporting to management employees who analysis in operational preparation and decision-
making for TESCO.

2. Offering supporters, creditors, shareholders and other stakeholders with suitable
documentation and knowledge to allow people to make reasonable and rational funding and
financial choices.
3. To transmit the true and truthful picture of a business organisation to stakeholders and the
world at large (Alzeban, 2019).
4. To assess whether companies use their financial and other business resources efficiently.
5. To provide detailed reports on the corporate growth and growth to the diverse stakeholders.
6. Assessing and reporting the effectiveness of initiatives faced by business organizations to
diverse participants.
7. To prove that Tesco is completely compliant with multiple governmental laws and regulations.
Regulatory framework of financial reporting
In order to manage processes and tracking within financial reports, a common system is
used by many individual business organizations to cover all aspects of financial reporting in
depth. The approving process ensures the far more detailed and suitable financial statements for
an organisation. It emphasizes compliance with generally accepted regulatory requirements to
allow uniform monitoring. IFRS (International Financial Reporting Standards) and GAAP
(Generally Accepted Accounting Principles) are part of the legislative framework, which
provides a collection of criteria, ideas, laws and concepts that accountants can follow when
working on different concerns. The legal framework is a series of phases that government
regulators are starting to take in order to increase the awareness various legislation. It is essential
for TESCO to comply with the legal framework, as it ensures that sufficient customer
information is exchanged with people and corporations. The main aim of the legal environment
is to provide continuity in accounting systems adopted by different business organizations
(Amidu, Yorke and Harvey, 2016). IFRS is a key component of the regulatory component, since
it offers specifications that assist in the sharpness of accounting records. The legal framework is
defined by government agencies and follows all the rules and legislation is also an objective. The
trust of shareholders and investor in companies like TESCO is powerful despite regular
accordance with statutory structure. Such structure is necessary for all publicly traded companies

accepting digital payments in order to attract potential shareholders. This also helps to address
different problems that can occur during the course of financial statements and increase
transparency. Prepared to follow are some major characteristics of the Financial Reporting
regulatory system including the following:
IFRS: International accounting principles are known as financial reporting guidelines for
publicly listed firms. The committee of the International accounting standard established certain
principles. These are key components of the complex legal framework for accounting. These
standards are agreed internationally by the organizations listed for conducting out financial
accounting and recording issues. These values act as a shared language for the valuation of the
company on a world basis, and as such the current share cost can be clearly understood and
comparable to all customers around the world. These criteria regard both benefits and drawbacks
of the corporation's organisation (Balsmeier and Vanhaverbeke, 2018).
GAAP: It means that business organization must be practiced when accounting standards
in a collection of generally accepted accounting principles, policies and practices. GAAP
provides a standardized basis for the disclosure of potential consumers of business issues.As per
general standards and regulation, GAAP helps regulate the field of finance. It aims to standardize
and control in all sectors the concepts, principles, and procedures used during reporting. GAAP
includes such issues as identification of sales, identification of balance sheets, and materiality.
GAAP's ultimate objective is to guarantee that the financial statements of a corporation are
accurate, accurate, and equivalent. This makes it possible for investor to make and derive
valuable information, particularly pattern items over a period of time, from either the financial
statements of the company. It also involves the evaluation of financial data across various
businesses.
Governance of financial reporting
In the current business climate, government regulators are focusing their efforts into
reinforcing executive compensation requirements for financial statements, with public companies
facing cash problems. Financial reporting laws specifically involve the owner, who is quite
responsible for giving views on the financial statements of the companies. The auditor may be an
internal auditor or a statutory auditor as per their responsibilities. Audit committee may be
employees of the government and are independent public inspectors. For the efficient

performance of corporate statements, internally and externally or statutory accounting
professionals are important within TESCO. The powers of internal auditing are, therefore,
minimal comparable to external investigators (Hadi, Suryanto and Hussain, 2016). Many other
regulatory agencies, such as the IAB, the ASB, etc., are also committed to good financial
statement accounting, but these bodies have specific standards and regulations for proper
management compliance. Furthermore, regulatory authorities specify the laws and duties of
relevant stakeholders such as accountants. Effective financial reporting governance provides an
actual picture of the efficiency of the company in order to protect stakeholder interest. Tesco has
following the rules and principles of IAS regulatory framework.
P2 Purpose of financial reporting for meeting organisational objectives, development and
growth:
Financial statements, such as revenue and balance sheet reports, offer a true picture of
company goals by income statement. The corporate accounting position for a corporate
corporation, as it ensures long-term success and growth. In TESCO, cash revenues are recorded
by administrators under the financial accounts, income statement, of the financial reporting
system to show their true performance over a particular period (Kimbro and Xu, 2016). Other
significant financial investigation benefits, listed further below, were prepared to take:
• It assists managers to take in-depth organizational plans for future objectives by having to rely
mostly on monetary information provided by declarations that reveal the present position. It
knowledge helps administrators build a base table of estimates for the potential. Data
relevantness provides a pathway to emancipate prospective corporate strategy.
• The second most influential objective of financial statements is to reveal to shareholders that
have provides extra opportunities for growth the key attributes and risk and effects. To do this is
both an obligatory and moral practice.To protect investors' interests from illegal activities
including securities trading, economic scandals etc., and each country has adopted some business
legislation allowing corporations to report information to the community and government.
• Following revenue recognition requirements promotes legislative auditing by supplying
excellently-crafted review relevant documentation. This allows it easier for the firm to raise