Regulation of financial accounting and reporting
The paper considers whether accounting standards should be regulated through accounting standard or whether managers should give voluntary information concerning financial accounting and reporting (Howieson et al. Corporate Regulations Through standardization of the accounting information, the expert knowledge is spread, enhancing consistency. It results in a reduction of risks associated with the auditors’ litigations through the provision of decisions of justifications. The financial auditors have the basis for justification of their actions and decisions through the use of standards to show how they are following the best accounting practices, hence increasing their professionalism values (Collier, 2015:112). Regulation of financial accounting and reporting results benefiting the users of standard services and products in connection to the network externalities development, meaning that the values of services and products rise as users are increasing.
However, the reporting is only essential or effective when the external stakeholders, as well as the management, are speaking a similar language. Meaning that the information being provided should be able to serve the demand of the stakeholder and be presented in a catchy manner (Henderson, et al. The international accounting standard setters have come up with some interpretation about the requirements for reporting which they term as understandable and decision-useful. Which in other words can be termed as transparency. It is only transparent if the correct insights of the firm financial position and firm performance are revealed as well as the risks that the firm is facing. The changes were made in such a way that if the accounting standards are complying with those of AASB, then it is assumed that they comply with the International Financial Reporting Standards (IFRS) (Hoskin, Fizzell, and Cherry, 2014:198).
The IFRSs is the umbrella term for the description of an authoritative pronouncement that is offered by the IASB. The IFRSs has been adopted and amended by the Australian Accounting Standard Board for the entities application in reporting through guidelines of corporation act of 2001 for the annual purposes of reporting starting from 2005 1st January. To ensure that the general statement of finance which is prepared for entities profits are in terms with the AASB and are also applicable internationally through International Financial Reporting Standards (IFRSs) (Bamber, and McMeeking, 2016:11). The Australian Accounting Standard Board has the policy of transaction neutrality, meaning that similar events and transactions are supposed to be accounted in the same way by all the entities be it in the profit sector, public sector and private sector that are not for profits.
Therefore IASB is currently counting on the endorsement of its standards for cross-listing by International Organization of Security Commissions (IOSCO) (Howieson et al. Owners’ Equity The following companies have been selected from the Pharmaceuticals, Biotechnology, & Life Science industry Alchemia Limited, Anatara Lifesciences Ltd, Aft Pharmaceuticals Limited, and Antisense Therapeutics Limited. In financial accounting, the items of equity or the owners are the difference in the value of liabilities and the values of assets of the entity. The following equation governs the owners’ equity = Asset- Liabilities. For instance, if an individual has a vehicle worth $12,000 which is an asset, but he owes $3,000 on loan concerning that car which is a liability. The same scenario is similar to Antara Life Science Company Ltd.
Whose Total Asset in 2017, and 2016 consecutively was 12,316,577, and 13,919,961, while liabilities for the two years consecutively was 295,438, and 444,618. Applying the same concept of Owner’s Equity = Asset –Liabilities gives the total owner equity of 12,021,139 and 13,475,343 for 2017 and 2016 consecutively. The third comparison is the Alchemia Limited whose balance sheet shows that the Total asset for 2016 and 2015 consecutively are 2,938,178, and 14,632,323. The liabilities are 201,503 and 3,122,346 for 2016, and 2015 consecutively, using the same formula above will give you the owner equity of 2,736,675 and 11,509,977 for the two years. For the Alchemia limited the income statement for 2016 and 2015 respectively. Shows that the company had the profit or loss following the income tax, expenses, of 21,425,996, and (-14,890,743) for 2016 and 2015 respectively. Showing that the company made some substantial loss of -14,890,743 and later improved greatly by attaining profit of 21,425,996 in the following year 2016.
Finally, for the AFT Pharmaceuticals Limited they had the revenue of 64,014, and 56,241 for 2016 and 2015 consecutively, the gross profit for the firm was 23,579, and 21,158 for the two years 2016 and 2015. The loss following the tax which is attributed to the owner of the company is (-13,267) and (-12,873) for the two years 2016 and 2015 respectively. Cash flow statement, Balance sheet, and income statement are the items of equity. Reference List Bamber, M. and McMeeking, K. An examination of international accounting standard-setting due process and the implications for legitimacy. The British Accounting Review, 48(1), pp. Uncertainty shocks and balance sheet recessions. Journal of Political Economy, 125(6), pp. Hellman, N. , Andersson, P. and Fröberg, E. C. Financial Accounting: a user perspective. Wiley Global Education. Howieson, B. , Hancock, P.
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