Deegan Topics :International accounting and The conceptual framework project
QUESTION 1
Does the adoption of IFR by different countries necessarily mean that the accounting procedures and practices they adopt will be consistent and comparable internationally?
QUESTION 2
It is often argued that the accounting standards of the FASB are rule-based, whereas the accounting standards issued by the IASB are principles-based. Rules-based standards by their nature can be quite complex, particularly if they seek to cover as many situations as possible. Do you think it would be easier to circumvent the requirements of rules-based or principles-based accounting standards?
QUESTION 3
Does the standardisation of accounting standards on a global basis necessarily equate with a standardisation in accounting practice?
QUESTION 4
Ball (2006, p. 17) states:
Under its constitution, the IASB is a standard setter and does not have an enforcement mechanism for its standards: it can cajole countries and companies to adopt IFRS in name, but it cannot require their enforcement in practice. It cannot penalise individual companies or countries that adopt its standards, but in which financial reporting practice is of low quality because managers, auditors and local regulators fail to fully implement the standards. Nor has it shown any interest in disallowing or even dissuading low-quality companies or countries from using its ‘brand name'. Individual countries remain primarily regulators of their own financial markets. EU member countries included. That exposes IFRS to the risk of adoption in name only.
(a) Why does the IASB not have any direct enforcement powers in relation to IFRS?
(b) Evaluate Ball's comments and provide an argument as to whether you agree or disagree with his view.
QUESTION 5:
Australia and China are two countries from different cultural areas. Identify and compare each country's environmental, cultural and accounting values.
QUESTION 6
The two main qualitative characteristics that financial information should possess have been identified as relevance and representational faithfulness. Is one more important than the other, or are they equally important?