Improving quality and consistency in corporate reporting
ACCA makes two major recommendations
The uniform application of International Financial Reporting Standards (IFRS) across different jurisdictions has been heavily questioned, since the implementation of high-quality accounting standards may not necessarily lead to high-quality reporting because of the influences of different socio-economic environments on financial reporting practices. This means that equal levels of compliance with mandatory disclosure requirements and/or consistent measurement and display of similar transactions between different companies may not be achieved.
ACCA's new research report, Worldwide Application of IFRS 3, IAS 38 and IAS 36, Related Disclosures and Determinants of Non-compliance, was produced in collaboration with the University of Stirling and ESSEC Financial Reporting Centre. The publication investigates the accounting for, and information disclosed under, IFRS 3 Business Combinations, IAS 36 Impairment of Assets, and IAS 38 Intangible Assets, and examines compliance levels with the mandated disclosures and their determinants.
This research makes two major contributions. First, it highlights areas on which preparers, regulators and enforcement bodies need to focus to improve the level of disclosure by companies. This should result in the provision of more complete information to the users of the financial reports. Second, it highlights areas that standard setters may need to improve in order to eliminate ambiguity in the interpretations of the standards. This should result in greater comparability of the information provided by companies.