International Financial Reporting - IFRS Sample Assignment

Added on - 21 Feb 2021

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International FinancialReporting
Table of ContentsINTRODUCTION...........................................................................................................................3LO 1.................................................................................................................................................3P 1. Analysing the financial reporting including governance of financial reporting andregulatory framework...................................................................................................................3P 2. Purpose of financial reporting in order to meet organizational objective............................4M 1. Analysing the purpose of financial reporting in order to meet stakeholder’s expectations.......................................................................................................................................................5D 1. Critical analysis on different governance of financial reporting and regulatory frameworkfor stakeholders............................................................................................................................5LO 2.................................................................................................................................................6P 3. Interpreting income statement, cash flow and balance sheet................................................6P 4. Calculating financial ratios of the organization....................................................................6LO 3.................................................................................................................................................6P 5. Benefits of IAS and IFRS.....................................................................................................6P 6. Models of financial reporting and auditing..........................................................................7M 3. Critical evaluation of financial reporting and auditing with the application of models andtheories.........................................................................................................................................7LO 4.................................................................................................................................................8P 7. Importance and difference of financial reporting across various countries..........................8M 4. Critical evaluation of the various factors which influences international difference infinancial reporting........................................................................................................................8D 3. Critically evaluating the application of IFRS to specific countries and difference infinancial reporting in relation with various theories and models................................................8CONCLUSION................................................................................................................................9REFERENCES..............................................................................................................................10
INTRODUCTIONFinancial reporting is referred to as the communication of financial information whichhelps in making strategic decision.International financial reporting Standards (IFRS) is knownas an accounting standardswhich are issued by the International Accounting Standard Board andIFRS foundation. It helps in providing common set of rules and language in order to betransparent, consistent and comparable across various international boundaries. This study willfocus on critically analysing the financial reporting in relation with governance of financialreporting and regulatory framework. It will further interpret the financial statements of thecompany and calculate financialratiosin order to gain wider perspective on the performance ofthe company. This study will also highlight on the benefits of IAS and IFRS by criticallyevaluating the various models of financial reporting. Lastly, it will demonstrate the importanceof financial reporting across various countries in international borders. HSBC is a multinationalinvestment company which was established in the year 1865 by Sir Thomas Sutherland. Itmainly deals in various financial services.LO 1P 1. Analysing the financial reporting including governance of financial reporting and regulatoryframework.Financial reporting is referred to as the communication of financial information whichhelps in making strategic decision. Financial reporting includes income statement, cash flowstatement, shareholders equity statement and balance sheet statement. International financialreporting is useful inproviding common set of rules and language in order to be transparent,consistent and comparable across various companies in international boundaries. Financialreporting is very useful in effectively analysing the owner's equity, liabilities and assets of thecompany in order to make resources available for the future growth and sustainability(Thomson,2015). It is very useful in harmonising the international and national standards by using thesame regulatory standards(Biondi, 2016). The key purpose of financial reporting is to criticallyanalyse, track and report the business data in an appropriate and efficient manner. This in turnhelps in enhancing consistency and accuracy in the preparation of financial statements. TheInternational Accounting Standard Board (IASB) states that the main objective of the financialreporting is to effectively provide financial information that is very crucial for the lenders,investors and creditors. They focus on setting common rules in order to effectively comply with
various international standards in order to make strategic decision for higher sustainable growthand development of the company. These principles were set by UK financial reporting council(FRC). The financial accounting principles are contained in UK GAAP which is useful inguaranteeing accuracy and consistency in financial reporting. This in turn helps company toeffectively secure the trust of stakeholders and investors. The aim of these financial reportingstandard is useful in organizing all the information of the company in such a way that it makes iteasier for the independent observer to effectively interpret the data. Information should becomparable as it helps in effectively comparing the financial data of similar entities(Abdelhamid, 2017). Conceptual framework for financial reporting is very useful in preparationof financial statements. Governance of financial reporting is useful in effectively disclosing allthe relevant information for the stipulated period. UK companies who are listed on the EuropeanUnion regulated market are needed to prepare their financial reports with IFRS adopted by EU.Regulatory framework in financial reporting is useful in increasing the confidence of the users inthe financial reporting process. It is very useful in regulating the behaviour of the directors andcompanies towards their investors. United Kingdom has its national financial reporting authorityi.e., Accounting Standard Board is the one who issues financial reporting standards in UnitedKingdom. Regulatory framework is required to prepare the financial statements as it helps inregulating the behaviour of the companies, increase users confidence and is also very useful inproviding relevant information(Singh, 2016). The key principle of regulator framework infinancial reporting is that it helps in providing relevant and reliable financial information. Thekey principles includes measurement, presentation, recognition and disclosure of all the materialitems in a systematic manner in financial statements.P 2. Purpose of financial reporting in order to meet organizational objective.The key purpose of financial reporting is to critically analyse, track and report thebusiness data in an appropriate and efficient manner(Knudsen, 2017). The key purpose of thefinancial reporting is to critically examine the financial health of the company, businessperformance, resource usage and cash flow analysis in order to make informed decision in anefficient and accurate manner. It is very useful in critically analysing whether the business ismaking profit or loss. It helps in determining which part of the business is making efficientprofit. Compliant financial reporting is useful in providing objective insight on the economic andfinancial situation of the company. This is also very useful in optimization and tax planning. The
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