1 Examine the context and purpose of financial reporting, including the regulatory frameworks and governance of financial reporting 1 1 The context of financial reporting 1 1 1 Definition Financial re[.]
1 Examine the context and purpose of financial reporting, including the regulatory frameworks and governance of financial reporting 1.1 The context of financial reporting: 1.1.1 Definition: Financial report is presentation of the formal record of financial information of business, including a company’s communication of information or the profit or loss for a particular period.(Cambridge dictionary) - Example of Financial Report: Balance sheet Income statement Cash flow statement Statement of shareholders’ equity 1.1.2 The regulatory frameworks and governance of financial reporting: The regulatory frameworks: FR must follow the standards: - IFRS: International Financial Reporting Standard IAS: International Accounting Standard Compare Similar IFRS IAS Is the current set of standards that is reflective of the changes in the accounting and business practices Differen Published IFRS were published IAS were published t in after 2001 between 1973 and 2001 Issued by The International The International Accounting Standards Accounting Standards Board (IASB), which is Committee (IASC) not for profit organization Contradict In case of a In cases of a ion contradiction, the contradiction, the IAS principles of IFRS are principles being taken into dropped consideration https://blog.superprofs.com/ifrs/difference-ifrs-vs-ias/ https://askanydifference.com/difference-between-ias-and-ifrs/ 1.2 Purposes of Financial Report: Objects Management Purposes of Financial Report Show the results of the management's stewardship of the resources entrusted to it Users ( such Investors, government, shareholders, ) as: Providing information about the financial position, financial performance and cash flows of an entity that is useful to a wide range of users in making economic decisions For example: Providing information to investors use the information to decide whether to invest Analyse the value of financial reporting for meeting organizational objectives and growth Identify the main stakeholders of an organization and assess how the context and purpose of financial reporting meets stakeholder needs and expectations Critically analyze the different regulatory frameworks and governance of financial reporting for specific stakeholders Give an account of the benefits of international accounting standards (IAS) and international financial reporting standards (IFRS)