Accounting Regulatory Practice Essay
Regulatory compliance refers to different processes and strategies which are prescribed for auditing and reporting information and ethics and corporate governance required by laws and regulation. In this paper we will consider the International Accounting Standard Boards (IASB) and discuss four different parts of regulatory compliance required by IASB for financial recognition and reporting. For the purpose of this paper, IASB is an accounting standard setting body which is responsible for issuing and implementing of IASs and IFRSs (IASB, 2008). We will discuss two IASs and IFRSs and highlight their compliance requirements for companies.
IAS 1 Presentation of Financial Statements prescribes the general layout of financial statements and minimum disclosure requirements for the companies. This is the basic and foremost important standard which assists in comparison with previous years and also with other companies. The minimum requirements of disclosure include statements indicating financial position, income level, changes in equity and cash along with summary of accounting policies and explanatory notes (IASB, IFRSs and IASs: Summary, 2008).
IAS 27 Consolidated and Separate Financial Statements is concerned with etsbalishing uniformity in recognition and reporting of accounting information between the parent company and its different entities. This enhances the realiability and comparability as consolidated statement repesented the group as a single economic entity and removes chances of double recognition of assets and liabilities and lays out ways of reporting transaction between entities in a group.
In particular it sets out rules for the circumtances in which an entity must consolidate its financial statements, changes in the level of ownership interest and loss of control in a subsidiary and any other information which would help users to evaluate the nature of relationship between different entities in a group (IASB, IFRS and IAS , 2008).
Similarly, IASB issues IFRSs to address those elements which are not covered by IASs. IFRS1 First-time Adoption of International Financial Reporting Standards is a crucial one. This was brought about for those companies which were previously following their local rules and regulation and decided to move to a common international approach of reporting. This standard ensures that the first IFRS financial statements meet users requirements and its benefits exceed cost. Furthermore, it should become basis for future IFRS accounting and reporting.
IFRS7 Financial Instruments: Disclosures governs the reporting of financial instruments ensuring that they are properly disclosed with their value to the business. Furthermore, risks attached with these instruments should be careful managed and disclosed in the financial statements.
IASB. (2008). About us. Retrived Dec 6, 2008, from International Accounting Standards Board: http://www.iasb.org/About+Us/International+Accounting+Standards+Board+-+About+Us.htm
IASB. (2008). IFRSs and IASs: Summary.
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