Accounting Theory and Current Issues: IFRS Implementation Analysis

This report provides a comparative analysis of IFRS implementation in Australia and New Zealand. It examines the reasons for adopting IFRS, the transitional issues faced, the challenges encountered by reporting entities, and the benefits of adoption. The report explores the similarities and differences in implementation strategies, including specific accounting standards and the issues that made them difficult to adopt. Recommendations are provided for both countries to improve the consistency and quality of financial reporting, focusing on enhancing auditing practices, addressing political and economic differences, and improving educational levels in accounting. The analysis aims to provide a comprehensive understanding of the impact of IFRS on financial reporting and its implications for investors and the economy.

Running head: ACCOUNTING THEORY AND CURRENT ISSUES
Accounting Theory and Current Issues
Name of the Student
Name of the University
Author Note

1ACCOUNTING THEORY AND CURRENT ISSUES
Table of Contents
Recommendations for Australia.................................................................................................2
Recommendations for New Zealand..........................................................................................2
Conclusion..................................................................................................................................3
References..................................................................................................................................4

2ACCOUNTING THEORY AND CURRENT ISSUES
Recommendations for Australia
1. The implementation of accounting standards needs to improve its auditing consistency
and enforcement at a global level. Australia has a strict policy of enforcement on rules
of accounting and trying to enforce the same in their member countries (Palea 2013).
The difference in the political and economic system should be reduced. As a result, it
reduces the amount of comparability in the reports, which is available also after
improving the audit's efficiency. Further, it enhances the quality of the report that also
increases the company’s value in the capital market. Investors would more like to
trust the company's fair and transparent accounting that is complied with IFRS
standard.
2. The Australian accounting bodies need to take some extensive step towards the
educational level as well. Australia requires adjusting the curriculum that is offered
into several business schools, as IFRS is not being taught regularly in Australia (Tan,
Chatterjee and Bolt 2014). This would make the investment more accessible across
the borders. Thus, Australia requires a grassroots movement to bring a change in the
perspective of education in accounting. Crucial steps for improving the educational
level in accounting will enhance future benefits as it ensures the reliability of the users
and all sectors of the economy.
Recommendations for New Zealand
1. The IFRS adoption lack of effective information quality as it reflects a negative effect
with identifiable intangible assets. The use of general rules and IFRS standards
creates a difference in information to be provided within the financial reports. The
adoption of the country with weak implementation mechanism harms the alleged
quality of IFRS and creates a pressure on the auditors for fair representation.

3ACCOUNTING THEORY AND CURRENT ISSUES
Therefore, it is recommended to imply changes with appropriate legal enforcement
(Lourenço, Branco and Castelo 2015). A proper legal implication will help to ensure
to report accordance with the IFRS rather than using general standards, which will fill
the gap of IFRS, and normal standards and improve the information quality.
2. The IFRS standards also have a negative effect on the standard cost due to
complicated procedures required for the local and IFRS standards. The adoption of
IFRS increases the costs to companies, especially audit fees (Pawsey 2017). To
maintain a uniform accounting standard, and to maintain a lower cost, IFRS can
declare some financial incentive for effective reporting. A single implied standard
reduces the complexity as well as the incentive for a fair declaration of reporting may
inspire the management or the auditors for preparing a transparent report that is
beneficial for the users as well as all the economic sectors.
Conclusion
Although several countries have moved to adopt IFRS, a top priority concern for all is
to unify the accounting at a global level. The IFRS ensures transparency and fairness of the
report so, encouragement for using the IFRS standard is required by the IFRS to deliver
benefit to the users as well as maintain position globally. An increase in quality information
through IFRS standards in reporting helps the users in making an effective financial decision.

4ACCOUNTING THEORY AND CURRENT ISSUES
References
Lourenço, I.M.E.C., Branco, M.E.M.D.A. and Castelo, D., 2015. Main consequences of IFRS
adoption: Analysis of existing literature and suggestions for further research. Revista
Contabilidade & Finanças, 26(68), pp.126-139.
Palea, V., 2013. IAS/IFRS and financial reporting quality: Lessons from the European
experience. China Journal of Accounting Research, 6(4), pp.247-263.
Pawsey, N.L., 2017, June. IFRS adoption: A costly change that keeps on costing.
In Accounting Forum (Vol. 41, No. 2, pp. 116-131). Taylor & Francis.
Tan, A., Chatterjee, B. and Bolt, S., 2014. The rigour of IFRS education in the USA:
Analysis, reflection and innovativeness. Accounting Education, 23(1), pp.54-70.