Please ensure you go through the uploaded materials.Also, plagiarism is soo important.i can’t afford to have any plagiarism on this paper. This is very important constitutes a chunck of my total score and should be written with informed knowledge and plagiarism free please.
Required
“..we acknowledge that accounting often involves judgement and that it is not a completely objective, purely technical discipline” (IFRS 2015, p.5)
IFRS Foundation (2015) Working in the Public Interest: The IFRS Foundation and the IASB IFRS Foundation: London
Critically discuss the ways the IASB acts to ensure there is as much objectivity as possible in global financial reporting.
This essay question is essentially getting you to focus on the issue of assessing how we produce good quality financial reporting. In order to assess the current system we need to be able to articulate theoretically informed reasons for the production of accounting standards and conceptual frameworks, and be able to consider the strengths and weaknesses of the current system.
This essay therefore requires you to briefly describe what the IASB does (technical) and how it does it (procedural) in respect of trying to maximise objectivity. In doing so you must explain what it means for accounting to be ‘not completely objective’ and why this matters for understanding what producing good quality financial reporting entails. In discussing how the products and activities of the IASB seem to offer obvious benefits in achieving some objectivity you must also explain any gaps in their provision and criticisms made of the IASB.
You must draw on the theories and concepts introduced in term 1. Ideas such as legitimacy, uniformity, normative, positive and critical theory will all give you insights into how we can assess the strengths and weakness of the IASB’s approach to creating consensus in global financial reporting practice.
The following documents are likely to help and should be referred to:
• Ball, R. (2006) “International Financial Reporting Standards (IFRS): pros and cons for investors Accounting and Business Research International Accounting Policy Forum pp.5-27
• Hines, R.D (1988) “Financial Accounting: In Communicating Reality, We Construct Reality” Accounting, Organizations and Society, 13 (3) pp.251-261
• IFRS Foundation (2015) Working in the Public Interest: The IFRS Foundation and the IASB IFRS Foundation: London
• IFRS Foundation (2015) Trustees’ Review of Structure and Effectiveness: Issues for the Review IFRS Foundation: London
• IASB/IFRS Foundation (2015) Conceptual Framework for Financial Reporting Exposure Draft ED/2015/3
• Tarca, A (2012) “The case for global accounting standards: Arguments and evidence” https://www.ifrs.org/Use-around-the-world/Documents/Case-for-Global-Accounting-Standards-Arguments-and-Evidence.pdf
• Wagner, J.W. (1965) “Defining Objectivity in Accounting” The Accounting Review July p. 599-605
You should also read the chapters in Deegan & Unerman. Other references are of course welcome.
Role of regulation
Role of theory
Due Process
Measurement
National Differences
Professional working practices (public interest and commerciality) – good audit
Choices about the purpose of accountants and accounting
All relevant – decide what you are going to focus on.
Role of regulation – why regulate, what alternatives and what might the problems be
Role of theory – brings consistency and underlying logic to thought and action
Due Process – procedures designed to bring qualities of rigour, consensus and democracy that enhance accountability of IASB
Measurement – source of different viewpoints – potential for different judgements
National Differences – is global uniformity possible – do the IASB claim it is?
Professional working practices (public interest and commerciality) – good audit
Critical Theory -Choices about the purpose of accountants and accounting – what is the stated aim of the IASB – how do they use research
Stage 1 – translate the question into an issue for discussion
Translate – the global accounting standard setters acknowledge that accounting often involves standard-setters and preparers making choices about how to represent company performance via financial reporting. Therefore it is not a completely objective purely technical discipline because the numbers presented are not the product of an easy or unproblematic consensus on how to think and act, FR is not a universally obvious or uncontested process of numerical calculation. FR is a much more complex issue.
Sit the comment in its context (what is the source document aiming to do?)– made even more complex by claims that the nature of the IASB and its views are not neutral.
So I’m explaining the complexity.
For example:
“This essay explores the IASB’s approach to producing normative theory through its CF, standards and the due process infrastructure. The IASB is a powerful player in shaping the information the global capital markets receive for investment decision-making and whilst 100+ jurisdictions have adopted their standards they are not immune from criticism. This essay reviews the IASB’s claims for global accounting against suggestions that there are problems with their accountability and the central claims they make for their product. It concludes that the IASB’s awareness of the complexities of achieving neutrality for the public interest are a re-assuring indicator of the quality of normative theory and global reporting they produce”– or not – whatever your informed opinion is
Read critical views such as Ball, Zeff, ideas about ND, difference measurements etc and then compare what the IASB say today and see whether you are convinced by it. Are their claims that they are not 100% objective helpful, realistic?
