Contents

• Introduction
• FRC’S decision: Consistency among AASB and IAS
• Cultural effects
• Major Changes to Australian Financial Reporting practise and REGULATION
• Entities
• Conclusion
• References

Description

This assignment is based on the following assignment description –
Topic
“In July 2002 the Financial Reporting Council (FRC) announced that it fully supported the adoption by Australia of the International Accounting Standards (IAS). The main predicted benefits of adopting the IAS were improved access to international capital flows and reduced financial reporting costs for Australian multinational companies. This announcement was in line with section 227 of the Australian Securities and Investments Act 2001 where the Australian Accounting Standards Board (AASB) was required to participate in the development of accounting standards for worldwide use. Australian reporting entities are now required to prepare their financial statements based on the Australian Equivalents of the International Accounting Standards”.
Read carefully the above paragraph then answer the following questions:
a) Why has the FRC decided that Australian Accounting Standards should be consistent with those being issued by the International Accounting Standards Board (IASB)? Are there any potential culture impediments to the international standardisation of accounting standards?
b) What are the major changes to Australian financial reporting practice and Australian financial reporting regulation that resulted following the adoption of International Financial Reporting Standards (IFRS) on 1 January 2005?
c) Identify the types of entities that are, or are likely to be, required to prepared financial statements in accordance with IFRS (their Australian equivalents) after 1 January 2005. For each type of reporting entity consider wether the benefits of convergence with IFRS, as stated in AASB Policy Statement 4, are likely to materialise.
d) The international standardisation of financial reporting does assume that a ‘one-size-fits-all’ approach is appropriate at the international level. Is this is a naive perspective? Explain your answer.
e) Briefly discuss some arguments ‘for’ and ‘against’ the international standardisation of financial reporting. Which arguments do you consider to be more influential?