Developments In The Financial Reporting †Myassignmenthelp.Com

Question: Discuss About The Developments In The Financial Reporting? Answer: Introducation There have been several listed changes that have occurred in the financial reporting sector for the past period. Many reflections have been outlined in regard to the financial environment and some of the changes include the listed below. Auditing Auditing has greatly changed and submitted to a lot of new changes as compared to before.Currently, alot of stress has been put on internal auditing rather than financial reporting. The manner in which such controls have been prepared and recorded has helped in efficiency of internal controls. These new changes have made work easier and reliable by information users.However, there are some difficulties of implementation of this change in the financial environment but many auditors try to make it cost effective and more profitable. (Eckerson, 2009) Digital reporting Over the past years, many investors of various business sectors relied mostly on financial statements purely.However, this has been changing gradually over time and currently, digital reporting of financial positions of companies is being used. Many financial environments have implemented it and access to information by various company investors is done now in a digital way. It is argued that financial statements given to investors to read are not automatically understood by all. (Eckerson, 2009). The statements contain detailed data which may be of no importance to an investor and thus digital reporting puts a person in position of identifying key information they require rather than going through the whole financial statement from the beginning to the end. Specialization of investors Investors have specialized in their key area of interest and study only. This development is being used since many think that, studying a whole financial statement would be a waste of resources as well as time. Specialization in their professionalism has been effective and now the majority concentrates only in their fields of interest. Investors get to identify good quality of standards they should provide in a given business entity. (Few, 2011) Length of financial reports There has been a progressive change in the size of financial reports printed and issued out by companies. Some time back, the statements were lengthy in nature and this was not effective for users. It is agreed by the majority that, not all financial statement users read the whole large documents to a level of understanding. Even the size would discourage an investor from going through the whole statement up to the end. Arguments on whether to include some information in disclosures have been the key point of discussion. Many investors have suggested that disclosures should not be overloaded since this action will discourages investors from reading such lengthy documents. The volume of financial statements has been reduced currently to simpler ones. This is because not all data outlined in the disclosures is necessary to investors. (IAS 27, 2011) Technical changes A lot of technical changes in the financial reporting environment have occurred recently in which users of financial information need to be updated upon. Consolidation and equity method is among the technical changes that have occurred. Amendments to the equity method have been implemented successfully. These amendments mainly affected consolidation to accounting determinations .Such changes helps in getting to know which entity should replace another. The consolidation procedures are being used currently by all non-private business entities.However, this change has its own impact on companies since a revaluation of variable costs must be done. Companies will have to be in a position to manage their time well since it is much involving mostly in cases where variables are plenty. (Few, 2011) Regulations The Australian Securities and Investments Commission have come up with several reviews on financial reporting statements. The regulations came up after the commission noted that some companies are using wrong criteria in revaluation of their assets. It outlined the limits to which directors should perform their work and this include; Production of adequate financial data by the management to users of such information Directors to make sure that business sectors use efficient methods and data. This helps them to justify contents in the statements submitted. Such implementations will lead to production of quality financial reports. Ensuring that companies employ adequate knowledge and techniques in tackling difficult tasks. This will enable quality results in working out of critical areas that require more skills. Current regulations by ASIC to management The ASIC gave out regulation in preparing of financial reports by internal auditors and the management of a particular company. It outlines specific roles for the management and auditors where it stated that, it is the role of the management to come up with enough data supporting reports made. Monitoring of these new changes should be keenly followed by the management and made aware to their investors. Investors have the right to know such changes included in the reports in order to plan well on the quality of services they should offer. Some of the change and development that will be applied as from 1 April July to 31 July is KAMs.These are vital sectors that the auditor need to consider and dedicate more time in making audit reports. The ASIC sees KAMs as important areas that auditors need to include also because they enable auditors in production of high quality financial reports. The data must be included in statements for easier retrieval by accounting information users. (Few, 2 011) Political Influence There have been a lot of political changes affecting the financial reporting environment arising from legality of some government systems. Areas of much interest to the government have enforced more disclosures as compared to sectors where they have less interest. This affects the manner in which financial reports are prepared and recorded. It has been noted that, some government based sectors employ schanges in financial reports in order to benefit them personally. Consequences have come out of such actions and they directly affect the quality and accuracy of reports produced by both the management and internal auditors. Balancing of government interests and companys interests becomes a major blow to auditors. (Eckerson, 2009) References Eckerson, Wayne W (2009). Performance Dashboards: Measuring, Monitoring, and Managing Your Business. John Wiley Sons. ISBN978-0-471-77863-9. Few, Stephen (2011). Information Dashboard Design. O'Reilly. ISBN978-0-596-10016-2. "IAS 27 Separate Financial Statements (2011)". www.iasplus.com. IAS Plus (This material is provided by Deloitte Touche Tohmatsu Limited (DTTL), or a member firm of DTTL, or one of their related entities. This material is provided AS IS and without warranty of any kind, express or implied. Without limiting the foregoing, neither Deloitte Touche Tohmatsu Limited (DTTL), nor any member firm of DTTL (a DTTL Member Firm), nor any of their related entities (collectively, the Deloitte Network) warrants that this material will be error-free or will meet any particular criteria of performance or quality, and each entity of the Deloitte Network expressly disclaims all implied warranties, including without limitation warranties of merchantability, title, fitness for a particular purpose, non-infringement, compatibility, and accuracy.). Retrieved 2013-11-29. "IFRS 10 Consolidated Financial Statements". www.iasplus.com. IAS Plus (This material is provided by Deloitte Touche Tohmatsu Limited (DTTL), or a member firm of DTTL, or one of their related entities. This material is provided AS IS and without warranty of any kind, express or implied. Without limiting the foregoing, neither Deloitte Touche Tohmatsu Limited (DTTL), nor any member firm of DTTL (a DTTL Member Firm), nor any of their related entities (collectively, the Deloitte Network) warrants that this material will be error-free or will meet any particular criteria of performance or quality, and each entity of the Deloitte Network expressly disclaims all implied warranties, including without limitation warranties of merchantability, title, fitness for a particular purpose, non-infringement, compatibility, and accuracy.). Retrieved 2013-11-29. Presentation of Financial Statements Standard IAS 1, International Accounting Standards Board. Accessed 24 June 2014. "The Framework for the Preparation and Presentation of Financial Statements" International Accounting Standards Board. Accessed 24 June 2014