Differences in Financial Reporting Practices

In: Business and Management

Submitted By Modinel
Words 815
Pages 4
The basic cause of international difference in financial reporting practice is the different degree of interference by governments in accounting.
It is understood that “International Financial Reporting Standards (IFRS)” has been adopted in many countries around the world, as a minimum for the companies that are obliged for financial reporting. IFRS has been implemented in nearly one hundred and fifteen countries around the world, whilst phasing out the previous standard of rules of Generally Accepted Accounting Practice or more commonly known as GAAP. The United States is the only large major country to holdout and not adopt IFRS. IFRS is increasing its widespread backing from all over the world.
All United States established companies are obliged to use the “Financial Accounting Standards Board FASB” (Wikipedia, 2012) many companies use these set of standards as they are “detailed and comprehensive” (Media Wiley) compared to the “International Accounting Standards Board IASB” (Wikipedia, 2012) which are more set in stone and less rule based.
What the United States need is a set of high quality accounting standards improves comparability. “It is generally believed that IFRS has the best potential to provide a common platform on which companies can report and investors can compare financial information.” (Media Wiley)
It is expected that if all countries adopt IFRS it will be beneficial for investors and others who use financial statements by reducing costs and increasing the quality of information available and the comparisons of alternative investments. Many companies who comply with the IFRS standard will gain from it as many more investors are likely to invest, especially those companies that have high levels of international endeavours. There were many delays in the implementation of IFRS as the IFRS standard had to be translated into several…...

Similar Documents

Reporting Practices

...Reporting Practices & Ethics Paper Schniqua Bennett HCS 405 October 22, 2012 Sandra Di Pietro Reporting Practices & Ethics Paper In the health care environment financial practices and ethical care finance is very important to produce successfully organizations. In the health care industry and in any business, ethical and financial practices are adopted to increase the organization value and consumer confident as well as protected the services or products provide by the organization and maintain the organizations brand name. With the cost of providing health care services, patient’s way of payment for these services and the environment in which those patients reside and receive those services are important elements that affects care. This is why financial management and financial reporting is also essential factors for any organization. Most organizations have mission statements, values and visions created to uphold the utmost integrity, honesty and respect for not only the community it serves but also the employees. Financial management can create a positive atmosphere of teamwork or a negative one of turmoil and failure. That is why it is very important for health care organizations to abide by the four elements of financial management. Four Elements of Financial Management The four elements of financial management are planning, controlling, organizing and directing, and decision making.......

Words: 907 - Pages: 4

How International Differences in the Ownership and Financing of Companies Could Lead to Differences in Financial Reporting

...ccsenet.org/ijbm International Journal of Business and Management Vol. 7, No. 3; February 2012 Adoption of International Financial Reporting Standards in Developing Countries: The Case of Nigeria Abdulkadir Madawaki College of Business, Universiti Utara Malaysia Sintok, 06010 Kedah, Malaysia E-mail: abdulkadirmadawaki@yahoo.com Received: September 16, 2011 doi:10.5539/ijbm.v7n3p152 Abstract The study focused on the adoption process of International Financial Reporting Standards (IFRS) on a developing economy, with particular reference to Nigeria. The paper is based on the data obtained from literature survey and archival sources in the context of the globalization of International Financial Reporting and the adoption of International Financial Reporting Standards (IFRS).Nigeria has embraced IFRS in order to participate in the benefits it offers, including attracting foreign direct investment, reduction of the cost of doing business, and cross border listing. In implementing IFRS Nigeria will face challenges including the development of a legal and regulatory framework, awareness campaign, and training of personnel. Recommendations were made to forestall such challenges which include strengthening education and training, establishment of an independent body to monitor and enforce accounting and auditing standards. Keywords: Financial reporting, Adoption, Accounting standard and Developing countries 1. Introduction Globalization of capital markets is an irreversible......

Words: 5879 - Pages: 24

Financial Reporting

...Financial Reporting Research In many cases, a business is not successful without a well-organized financial branch of their company. Whether it is a small business and reporting is done by the owner or if it is a large business that has a financial department, a company needs to know if it is making a profit. Modern accounting is believed to have begun around 1494 A.D. Book keeping entered into the Unites States in late 19th century. The first accounting exam was held by and organization in 1896. Today, accounting is used throughout the world and business to communicate, buy, sell and barter with each other very frequently and therefore, International accounting principles have been developed for the entire globe (Csebfalvi, 2012). In today’s highly competitive business world the environment requires companies to create a business strategy that includes accounting. This portion of their business strategy will help them achieve their strategic goals for the organization. In 1973, the International Accounting Standings Committee came in to existence in order to establish new international standards. The International Accounting Standards Board is the committee responsible for developing International Financial Reporting Standards (Knowledge guide to international accounting standards). This firm ensures that businesses are applying these standards to their financial reports. The first recorded account of international accounting was an article by Lord Benson called......

Words: 1160 - Pages: 5

Financial Reporting

...Financial Reporting Financial Management 320-E1WW May 26, 2013 Financial reporting is method many organizations most perform in order to find out what their financial standings are. It informs them if they have made a profit, no profit or if a change in allocation of funding needs to be adjusted. This is the job of managers to be able to access this and make changes. Managers in order to do this must have knowledge and the ability to perform properly accounting practices. There are four basic financial statements that manager need to use to answer questions about where the organization stands financially. Those four statements are balance sheet, statement of revenue and expense, statement of fund balance or net worth, and statement of cash flows. The balance sheet is exactly what its name states. It shows the balance of what the organization owns, owes and what is worth. The balance sheet shows these parameters in a particular point in time, not a period of time. It displays these figures as a as of date. The balance sheet displays in two rows two years of financial data with the most current data in the left hand column. On the balance sheet there are three distinct categories that displayed to be balanced. These areas on the balance sheet are assets, liabilities, and fund balance. Under the asset area there is current assets which equal current assets or cash equivalents, property, plant and equipment assets which equal long term assets and other assets which are...

Words: 1649 - Pages: 7

Corporate Financial Reporting Practices in Bangladesh: a Case on Leasing Companies

...Executive Summary Non-Bank Financial Institutions (NBFIs) play a significant role in meeting the diverse financial need of various sectors of an economy and thus contribute to the economic development of the country as well as to the deepening of the country’s financial system. According to Goldsmith (1969), financial development in a country starts with the development of banking institutions. As the development process proceeds, NBFIs become prominent alongside the banking sector. The major business of most NBFIs in Bangladesh is leasing, though some are also diversifying into other lines of business like term lending, housing finance, merchant banking, equity financing, venture capital financing etc. Lease financing, term lending and housing finance constituted 94 percent of the total financing activities of all NBFIs up to June 2006. Industrial Promotion and Development Company (IPDC) was the first private sector NBFI in Bangladesh, which started its operation in 1981. Since then the number has been increasing and in December 2006 it reached 29. Of these, one is government owned, 15 are local (private) and the other 13 are established under joint venture with foreign participation. Leasing in Bangladesh, like in many of its peer countries, owes its origin to the efforts of the International Finance Corporation (IFC), Washington. At the instance of IFC, the first leasing company in Bangladesh, Industrial Development Leasing Company of Bangladesh Ltd. (IDLC) was......

Words: 15148 - Pages: 61

Reporting Practices and Ethics

...Reporting Practices and Ethics Yolanda Jones HCS/405 March 10, 2014 Darlene Tomlinson Page Break Reporting Practices and Ethics The healthcare industry is a rapidly growing segment of the U.S. economy, amounting to over $2.1 trillion annually. Healthcare focuses on diagnosis, treatment, and prevention among other things. Health care makes up one sixth of the U.S. GDP it is the largest source of the nation's public expenditures. With large amounts of revenue going in and out of hospitals and facilities and health care reform accounting can be challenging. To help ensure fair and accurate financial reporting, there are practices and ethical standards that must be followed when accounting for finances in health care. This paper will provide the four elements of financial management and standard accounting principles and ethics. Financial Reporting Practices The Financial Accounting Standards Board was established in 1073. It is the designated organization in the private sector that establishes standards of financial accounting for nongovernmental entities. The standards established are officially recognized as authoritative by the SEC and the American Institute of Certified Public Accountants. The FASB also has accounting standards for health care entities. "The AICPA Health Care Expert Panel developed technical guidance on the application in consolidated financial statements of a recent accounting standards update for health care entities"...

Words: 1309 - Pages: 6

Financial Reporting

...Keeping things simple Annual report and financial statements 2010 Contents and introduction ConTenTs The DIreCTors’ reporT AnD busIness reVIeW 1 Highlights 2 Chairman’s statement 4 Strategic review 4 Business review 5 Market overview 6 Our strategy 8 Key Performance Indicators 10 Our business model 12 Risks and uncertainties 14 CSR/Today 16 Our people – Values in action 18 Performance review 18 Operating review 23 Financial review 26 Governance 26 Board of Directors 28 Corporate governance report 32 Directors’ remuneration report 41 General information FInAnCIAL sTATemenTs 43 Group financial statements 43 Directors’ statements of responsibilities 44 Independent auditors’ report 45 Consolidated financial statements 45 Group accounting policies 50 Consolidated statement of comprehensive income 51 Consolidated balance sheet 52 Consolidated cash flow statement 53 Consolidated statement of changes in equity 54 Notes to the Group financial statements 75 Company financial statements 75 Company accounting policies 77 Company balance sheet 78 Notes to the Company financial statements InVesTor InFormATIon 86 Five year summary of results 87 Supplementary information 88 Investor relations and financial calendar Our business We are the UK’s fourth largest food retailer by sales with an annual turnover in excess of £15bn. We have 425 stores across Britain, ranging in size from 10,000 to 40,000 square feet. Over 10m customers visit our stores each week served by over 134,000......

Words: 57108 - Pages: 229

Reporting Practices

...Reporting and Ethical Practices HCS 405 June 24, 2014 Reporting and Ethical Practices Financial and accounting professionals must follow the ethical standards that regulate the type of business they conduct, who they conduct business with, and how they use their skills to conduct their business. These ethical standards are defined by professional finance organizations and the Financial Accounting Standards Board. This article will discuss reporting and ethical practices for any financial and accounting organization. It will include a summary of generally acceptable accounting principles and general financial ethical standards, as well as, summarize the four elements of financial management. This article will conclude by discussing researched articles on financial reporting practices, ethical standards, and financial management within the health care organization. Generally Accepted Accounting Principles (GAAP) and Financial Ethical Standards According to "Business News Daily" (2014), “Generally Accepted Accounting Principles (GAAP) is a combination of guidelines, comprehensive rules, and generally accepted standard practices utilized throughout the accounting industry to prepare and standardize financial statements, such as balance sheets, income statements, and cash flow statements” (Generally Accepted Accounting Principles (GAAP): Standards & Rules for Accountants). In 1999, the American Institute of Certified Public Accountants (AICPA) designated the...

Words: 984 - Pages: 4

Financial Reporting

...this amount varies among the insurers and the individuals who are not insured. Finally there is also the cost which refers to the cost the hospital incurs in providing the service (Sarah et al, 2001). There are some financial reporting practices that are unique with the heath care providers. For instance, the bad debts in a health care provider must be written off and then recorded as expenses. In addition, for any credit the provider gets it is required to pay an interest expense for the funds that have been borrowed. AICPA (1996) observes that the heath care provider do not pay the non salaried physicians who are instead paid by the insurer or the patient. Further more, the cost of equipment and other assets is also spread over the estimated life with the appropriate portion of the cost of purchasing the product treated as an expense with each accounting period. This spreading of cost over the estimated life of an asset is referred to as depreciation for tangible goods and amortization for intangible goods. The financial statements for a health care provider are prepared by an independent auditing firm. In particular, the auditing firm examines the evidence that supports the disclosures in the statements. There are several documents used in the financial accounting of a health care provider. In brief, the income statement generally offers a presentation on how the provider has gotten the money and how money has been spent. The total margin is reflected in the income......

Words: 603 - Pages: 3

Reporting Practices and Ethics

...Reporting Practices and Ethics Paper Ruby Anderson HCS/405 12/15/14 Jennifer Noren Reporting Practices and Ethics Paper Financial reporting practices and ethical Standards in health care Generally accepted accounting principles are shaped by economic and political forces. It follows increased world-wide integration of both markets and politics. Since most market and political forces are driven by reductions in communication and information processing costs makes them remain local for foreseeable future thus making it unclear on how much coverage should actually occur. There is some evidence on which build an assessment of the advantages and disadvantages of uniform accounting rules within a country, let alone internationally. “A deeper concern is that there inevitably will be substantial differences among countries in implementation of IFRS, which now risk being concealed by a veneer of uniformity. The notion that uniform standards alone will produce uniform financial reporting seems naive” (Taylor and Francis online, 2006). Fraud and abuse in health care is unfortunate but also common. Although there is not a precise measure of fraud or abuse it does still exist and can cost tax payers billions of dollars while putting welfare and beneficiaries at risk. According to (Department of Health and Human Services, 2014) Medicare fraud and abuse increases the strain on the Medicare trust fund, where the impact of those losses and risks magnify as Medicare continues to......

Words: 872 - Pages: 4

Financial Reporting

...Executive summary This report has three main parts. Firstly, I describe the different users (Stakeholders) of Finance statements and their needs and assess the implications for users of financial statement. Then, I explain the legal and regulatory influences on financial statements preparation like Companies Acts. After that, I describe how different policies are dealt with by accunting and reporting standard including FRS, IASB, SSAP, GAAP and ASB). Furthermore, I calculate accounting ratio consisting of Solvency, Profitability, Capital Gearing, Dividend Yield, Assets to assess the performance and position of Vinamilk and then prepare a report incorporating and interpreting accounting ratio, compare against the previous year, regional and also local competitors. This report provides an analysis and evaluation of the current and prospective profitability, liquidity and financial stability of Vinamilk Corp. Methods of analysis include ratios such as Debt, Current and Quick ratios, etc. Results of data analysed show that all ratios are below industry averages. In particular, comparative performance is a little bit downfalls in the areas of profit margins, liquidity, credit control, and inventory management. The report finds the prospects of the company in its current position are not positive. The major areas of weakness require further investigation and remedial action by management. Recommendations include: • improving the average collection......

Words: 6334 - Pages: 26

Reporting Practices and Ethics in Financial Healthcare

...Financial Reporting Practices and Ethics in Healthcare Jeanette Jordan 03/07/16 HCS-405 Prof. Adrian Parker Abstract Financial management is a vital part of organizational effectiveness, it is a discipline with a long and respected history. Health care service delivery is a business, and the concept of financial management assists in balancing the inflows and outflows that are a part of the business. The managers within a health care organization will generally have one of three views the financial view, the process view and, the clinical view. Health care managers must of necessity interact with one another. Thus, managers holding different views will be required to work together. So, health care managers who understand health care finance will be able to interpret and negotiate successfully such interactions between and among viewpoints. (Mohamed Refaat, 2016) There are four elements of financial management planning, controlling, organizing and, decision making. In planning the financial manager identifies the steps that must be taken to accomplish the organization's objectives. Thus, the purpose is to identify objectives and then to identify the steps for accomplishing these objectives. In controlling the financial manager makes sure that each area of the organization is following the plans that have been established. In organizing the financial manager decides how to use the resources of the organization to most effectively carry out the plans that have been......

Words: 1131 - Pages: 5

Reporting Practices

...Reporting Practices and Ethics Reporting Practices and Ethics When writing this essay, first three articles that address financial reporting practices and ethical standards in healthcare had to be found. Finding god articles to use as reference was not an easy task. Upon reading the chosen articles, much thought about this topic began to enter my mind. The decision to keep reading even more articles and expand horizons before beginning to compose was a good choice. Because with every article read, my opinions changed and I gained more knowledge. The chosen articles The first chosen article is titled, “Financial reporting responsibilities” written by Carl Tietjen. This article addresses the need to update a 35 year old model that has been generally used in most financial reporting practices. In the article, Tietjen states that most organizations have thus responded by examining their own reporting practices. Then they have been implementing new methods to try to ensure that moral and ethical standards can be upheld. This article does not specifically address healthcare finance however it seemed to be a good reference point for the research. The second article used is titled, Accounting for false objectivity, written by Ralph Palliam. This article states that concludes that, “There is a need for more moral training and leadership to motivate professionals (accountants) to act in the public’s best interest, not only for the sake...

Words: 892 - Pages: 4

How International Differences in the Ownership and Financing of Companies Could Lead to Differences in Financial Reporting

...How International Differences in the Ownership and Financing of Companies Could Lead to Differences in Financial Reporting   Introduction The major objective behind the development of International Financial Reporting Standards (IFRSs) has been to achieve financial reporting across different countries, which could be easily compared. In order to achieve this kind of comparability, it is very crucial that the IFRS be used by all the countries involved in the same way, and that these standards be interpreted as well as applied in a manner that is quite consistent in these countries thus leading to consistency in terms of rules or form of application and consistency in the actual manner in which they are applied. However, there are many factors that make it hard for countries and companies to apply these rules consistently (Whittington, 2005). Differences in the ownership structure and the way these companies are financed have been singled out as leading to the differences in financial reporting of these companies. In cases where countries do come up with very drastic changes or the professional accountants also fail to clearly interpret and use these IFRS in a manner that is consistent, then there is the risk of not achieving comparability. The differences in accounting practices across countries are not obvious when it comes to all accountants. Such differences that have been widely noted have to do with the ownership and financing practices of companies, which have......

Words: 1874 - Pages: 8

Financial Practices

...Reporting Practices and Ethics Paper HCS405 July 29, 2012 Professor C. Brew Reporting Practices and Ethics Paper Financial accounting and financial management are the basis for health care accounting. The GAAP is a cornerstone of all accounting practices. Financial management aides and guides health care accounting practices in today’s health care settings. These two elements are the building blocks for a solid health care organization. Without the two, there is risk of fraud and unethical practices within health care. In financial accounting there are four elements of financial management. The first element is planning. In the planning element of financial management, the objective is determined and then the steps needed to reach that objective are identified so that the goal of accomplishing the objective can be met. The second element of financial management is controlling. In controlling the goals set in the planning element are monitored to ensure that the goal is on track. In the controlling stage of planning, managers use reports to track the goals, compare information and to gain feedback on the status of the goals. Organizing and directing is the third financial management element. In this element the manager works daily to track the progress of the goals, reviews daily the results of the organizing and is active daily in the progress of the goals. The final element of financial management is decision making. In the decision making element the......

Words: 1271 - Pages: 6