A Case Study of True and Fair View Override in Financial Reporting

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This study reviews expediency and influences of extensible Business Reporting Standard in terms of Financial and Business Reporting Value Chain by implying flow of financial information from business operations to internal and external reporting to end user groups of financial reports. Further, identifies influences, the International Accounting Standard Board (IABS) had on extensible Business Reporting Language (xBRL) and the convergence of International Financial Reporting Standards (IFRS). The IASB had an effect on developing a conceptual framework and integrating xRBL into financial reporting standards together with acceptance and enforcement of these standards at global stage. xBRL has revolutionized financial reporting, as it allows corporate financial information to be aggregated, transmitted, and analyzed faster more accurately — Hoffman and Strand 2001. This research study may diverge due to developments in conceptual XBRL extensions by various sources, for example: IFRS taxonomy, and Canadian XBRL. This paper also examines implementation of IFRS taxonomy, and its current status in Canada with regulatory impacts and benefits of XBRL for Canadian companies. These impacts will be discussed by using literature review along with other aspects of XBRL. In fact, Analyses have been done on changes made in financial statement presentation with new concepts on financial performance and financial position that has emerged due to adoption of IFRS and XBRL web based language. These improvements in financial statements together with additional disclosure requirements may perhaps benefit all stakeholders alike. This paper mainly focuses on structural overview of conceptual XBRL extensions, and changes in financial reporting standards — IFRS, with business information systems re-engineering.

The focus of the study was on examining International Financial Reporting Standard (IFRS) Adoption and The Value Relevance of Accounting Information in Selected Africa Countries: A Comparative Analysis of Nigeria and South Africa. The focus on cross country analysis in the subject of IFRS adoption and value relevance is growing quite slowly. However. Cross country empirical studies for countries in Africa continent is largely non-existent or at best difficult to find. This study address this gap by adopting a cross-country approach using Nigeria and South Africa. The study employed a longitudinal research design. The population and the sample of the study comprised the top companies in each country by way of market capitalization for the countries in the study, namely: Nigeria and South Africa as at December, 2019. The convenience sampling technique was used in the study to select listed firms across the two countries. Secondary data sourced from corporate annual reports of the sampled quoted firms got from the Nigerian Exchange Group (NGX) and Johannesburg Stock Exchange (JSE) were used for the study. The study made use of panel data regression and the results revealed that for South-Africa, Earnings Per Share (EPS) and EPS*IFRS were both positive respectively, and also statistically significant. Book Value Per Share (BVPS) and BVPS*IFRS were both positive respectively, and also statistically significant. Dividends Per Share (DPS) and DPS*IFRS were both positive respectively, and were also statistically significant. Intangible Assets (INTA) was not value relevant in the pre-IFRS period given the absence of the statistical significance of the variable, but show some evidence of weak incremental relevance from IFRS adoption as the interaction between INTA*IFRS was significant. Cash Flow Per Share (CFPS) was positive and significant; and furthermore, the interaction of CFPS*IFRS was also positive and statistically significant. For Nigeria, EPS and EPS*IFRS are both positive respectively, with EPS statistically significant. BVPS and BVPS*IFRS are both positive respectively, with only BVPS statistically significant. Furthermore, DPS and DPS*IFRS are both positive respectively, and statistically significant. INTA and INTA*IFRS are both insignificant respectively. Finally, CFPS is positive, though not significant; but the interaction of CFPS*IFRS is positive and significant. It therefore implies that, EPS*IFRS, BVPS*IFRS, DPS*IFRS, INTA*IFRS, CFPS*IFRS shows whether EPS, BVPS, DPS, INTA, CFPS reflects a stronger statistical significance in explaining share price when interacted with IFRS adoption (post) than without it (pre) in the two selected Countries( Nigeria and South Africa) . The study concluded that, there is the need for capital markets in developing countries to become more efficient and for companies and accounting regulatory institutions to ensure timely and quality disclosures of accounting information. It recommended that stock exchanges in developing markets should put a frame-work in place that measure the rate of compliance of each listed firm’s annual report with IFRS demands to enable the sanctioning of firms that recorded below the expected compliance level. The study also recommended amongst others, that financial reporting councils and accounting standards setting bodies globally should support the effort to ensure improved compliance with IFRS as a matter of policy.

Stock Market Reaction to Elimination of the Reconciliation from IFRS to U.S. GAAP in the USA

Manuscript Type: Theoretical Main topic: A tsunami of regulations since the 2013 financial crisis is steering toward’s Europe’s financial service sector. At the same time the accounting standard for financial institutions core products the financial instruments will be changing. Whenever such new accounting and reporting standards are issued by the IASB (International Accounting Standards Board) and this includes also footnotes, those disclosures become increasingly relevant. The reason for that is that the footnote disclosure represent an important source of information to provide transparency and enable the investor to understand the ex-post implementation business impact. In this paper the focus will be on those new footnote disclosures. As disclosures according to IFRS 9 become compulsary by 2018, the existing IFRS Taxonomy for IFRS 9 al-ready developed by the IFRS Foundation, represents a suitable and objective framework to assess IFRS 9 im-pact on disclosures at an early stage. The specific goal of this paper is to perform a conceptual gap analysis considering the IFRS 9 taxonomy issued by the IASB and the Financial Reporting (FinRep) taxonomy on IFRS 9 issued by the European Banking Authority (EBA). In general, the IFRS Taxonomy is not used very much in practice. This is not understandable as several advantages relate to the IFRS Taxonomy: principle-based accounting standard does very often not define specifically disclosure rules for each and every topic, therefore to derive reporting elements would very difficult to accomplish. A robust taxonomy development and governance process leading to the IFRS Taxonomy simplifies the task of interpretations and the actual expression of reporting elements. The IASB started to perform a review process of the XBRL Due Process in 2013. As a result the development of the IFRS Taxonomy should become part of the general due process of the financial reporting standards. Due to these changes it is expected that the importance of the IFRS Taxonomy will be growing. The FinRep Taxonomy has become mandatory since 2014 for all banks within Europe, to fulfill the regulatory reporting requirements according to the Capital Requirements Directive (CRR) IV. Results: Even though the disclosures for external reporting and for regulatory reporting are based on the same accounting framework the International Financial Reporting Standards (IFRS), differences can be observed with regard to disclosures, which are partly material. These differences become transparent when analysing IFRS- and FinRep-Taxonomy reporting elements. This is caused by the principle-based IFRS, which enable scope of interpretation and the different objectives of the IASB and the banking supervision. Whereas the IASB follows the objective to develop industry non-specific international financial reporting standards, the banking supervision core focus lies on the banking industry. The EBA follows specific information re-quests with the FinRep Taxonomy in the role as banking supervisory. The IASB intends to provide decision useful information for investors. Nevertheless these two taxonomies provide the possibility for a starting point for the harmonization and the development of common practice disclosures, which could counteract against a heterogeneous financial reporting and the issue of “information overload”.

In today’s business climate, financial statements disclosed by firms have huge impacts on the society. Financial statements are heavily used by shareholders, creditors, labor unions and government authorities to assess a firm’s financial position, performance and viability. Past experiences show that the reliable and accurate accounting information enables financial market participants to make more rational decisions. International Financial Reporting Standards (IFRS) play a vital role in the preparation of financial statements. The adoption of IFRS has a huge impact on the financial statement elements; assets, liabilities, equity, revenues and expenses. International Financial Reporting Standards contribute to create a business climate that enables investors to make more rational and accurate investment decision. Epstein (2009) asserts that IFRS adoption results in higher financial reporting quality. International authorities such as World Bank, International Monetary Fund, and International Organization of Securities Commissions (IOSCO) encourage the adoption of IFRS to advance effectiveness of financial markets, which in turn may spark the economic growth of adopting countries (Wyatt and Yospe, 1993). Ball (2008) pointed out that financial reporting is one of the most important economic activities. Further, Li and Shroff (2010) declare that high-quality accounting information enables the management of a firm to make much more effective investment decisions, translating into high growth rate of economy. A major driver for International Financial Reporting Standards (IFRS) adoption by countries is the desire to integrate into the global economy. Some of previous research studies show that the adoption of International Financial Reporting Standards has a positive impact on the economic growth. The adoption of IFRS has positive impacts on international trade and significantly enhances the comparability of financial statements prepared by firms from different countries. Samuels and Piper (1985) stated that the adoption of IFRS has a great potential to facilitate global trade activities. The objective of this paper is to contribute the existing literature on the association between IFRS implementation and economic growth within countries. To achieve the above, a thorough literature review will be conducted with the objectives of developing effective mechanisms for IFRS implementation. In this regard, the paper argued that CEMAC government authorities and regional business organizations should make persistent efforts to enforce IFRS.

Background: The impact of International Financial Reporting Standards (IFRS) on financial reporting quality and investor decision-making has been a subject of significant academic interest. Understanding the unique attributes and dynamics of these markets is crucial for optimizing investment strategies and achieving financial goals. Aim: Considering this, this study assessed the impact of IFRS 6 on investors' returns by focusing on African firms engaged in exploration and evaluation activities. Methodology: The study employed an ex-post facto research design, and data were collected from secondary sources, specifically the financial reports of the investigated firms. The study population included 76 African-listed extractive firms as of December 31, 2022. A purposive sampling technique was used to select 59 firms based on data availability. The study covered a period of 11 years spanning from 2012-2022. This period was chosen to ensure robust analysis. Secondary data collected from the annual reports of the investigated firms were analyzed using descriptive statistics and robust regression. Findings: The findings revealed that IFRS 6 positively and significantly affected debt repayment but negatively impacted return on equity (ROE) and return on sales (ROS). The analysis also showed a positive but statistically insignificant relationship between IFRS 6 and the share price. Finally, IFRS 6 had a negative but statistically insignificant effect on equity capital raised. Contributions: This study makes significant contributions to government regulations by providing empirical evidence on the impact of IFRS 6 on investor returns in African extractive firms. The findings can help policymakers tailor regulations to ensure that the application of IFRS 6 in the extractive sector promotes transparency, improves financial outcomes, and enhances debt repayment abilities. By understanding how IFRS 6 affects key financial metrics, regulatory bodies can better design policies to ensure that firms are held accountable for their exploration and evaluation activities, fostering a more stable and well-regulated investment environment. Secondly, the study offers insights into the practical effects of IFRS 6 on financial reporting and profitability metrics such as ROE and ROS. Recommendations Regulators: Regulatory bodies in Africa should revise or provide guidelines on IFRS 6 to ensure its implementation enhances financial performance and investor outcomes, potentially by incorporating measures to improve profitability recognition. Stakeholders: Stakeholders, including investors and financial analysts, should be educated on IFRS 6 to better understand its impact on financial reporting and decision-making. Researchers: Future studies should explore the underlying factors influencing the negative impact of IFRS 6 on ROE and ROS, as well as the insignificant effects on equity capital raised. Investigating other relevant financial standards and their interactions with IFRS 6 may yield deeper insights into financial performance in the extractive sector. Lastly, the regulatory bodies in Africa should consider revising or providing guidelines on the application of IFRS 6 to ensure that its implementation supports better financial performance and investor outcomes, potentially by including additional measures that enhance profitability recognition.

Purpose This study aims to identify a taxonomy of financial ratios derived from financial statements prepared using International Financial Reporting Standards (IFRS). The work first empirically establishes and then statistically validates the taxonomy of financial attributes captured in financial ratios. In 2005, the European Commission required that publicly traded companies in the European Union use IFRS as the basis for financial reporting. In the same year, Australia adopted IFRS as a basis for financial reporting. Since then, 120 countries and reporting jurisdictions have adopted IFRS as the basis for financial reporting. Given that IFRS predominate in the financial reporting world, it seems essential to establish and validate IFRS-based ratio attributes. Only then can reliance upon and comparability of these ratios be warranted (Altman and Eisenbeis, 1978). Using principle component analysis, the authors empirically identify nine stable attributes (factors) for ratios drawn from IFRS-based financial statements from 84 counties. The findings provides an empirical basis to formulate testable hypotheses regarding the predictive and descriptive utility of financial ratios draw from IFRS-based financial statements. Design/methodology/approach The paper begins with a broad category of IFRS-based financial ratios, 50, found in practice and research, including income statement, balance sheet, cash flow, profitability and liquidity measures. Then, a sample of companies from the manufacturing sector is segmented using IFRS as a basis of financial statement reporting. Next, principal component analysis, a method of factor analysis, is applied to empirically identify factors and financial attributes captured in financial ratios used in research inquiry and financial analysis. Findings The authors find that the financial attributes captured by IFRS-based ratios go well beyond the traditional measures of profitability, liquidity and solvency. The authors identify nine factors that are interpretable and stable over the period, 2011-2015: asset relationship, asset turnover, capital structure, expense insight, fixed asset usage, inventory turnover, liquidity, profitability margin and performance return. Interestingly, the authors did not find a separate cash flow factor. Most importantly, the results corroborate that IFRS-based ratios are consistent and comparable, despite innate country differences that have been shown to influence the application, interpretation and use of IFRS. Research limitations/implications The efforts are limited to the manufacturing sector. The financial attributes may be different in service, distribution and retail sectors. Also, limiting the effort are the ratios selected in this study. A broader range of ratios may widen the identification of unique stable factors over time. Practical implications The findings provide a basis for research and analysis efforts regarding the validity, comparability and stability of IFRS-based financial ratios. Most importantly, the results corroborate that IFRS-based ratios are consistent and comparable, despite innate country differences that have been shown to influence the application, interpretation and use of IFRS. The findings should be of interest to international and national financial reporting standard setters, investors and analysts. Originality/value An empirically evidenced classification system for IFRS-based financial ratios has yet to be determined based on a financial statements across a wide breadth of countries and reporting jurisdictions. Identification of stable interpretable factors, financial attributes, has been limited. The first is that inquiry has been limited to domestic-based, such as US Generally Accepted Accounting Principles, financial ratios. The second is inquiry has been limited to IFRS-based financial ratios within a specific country.

Most of the countries in GCC region (except Saudi Arabia) have adapted IFRS in 1990s except Oman who was the first to adopt in 1986. Therefore, it can be concluded that, Qatar is one of the countries which adopted IFRS since long time ago. However, no serious discussion was there so far to see whether IFRS adoption in emerging economy country like Qatar is feasible or it has been taken as granted. The adoption of IFRS at country level has sparked two contrasting, but not mutually exclusive viewpoints. One view, which favors IFRS adoption, is that IFRS produces better financial reporting since it is superior accounting standards in comparison to domestic accounting standards (Barth 2008). Additionally, convergence to a singular accounting standard ensures greater comparability that helps investors to make their investment decisions. It results improvement of information environment in a country and hence contribute towards lowering the cost of capital (Barth 2008). The opposite view is that, the accounting quality is shaped by political and economic forces (Ball 2006) and therefore Accounting standard solely will not translate into higher quality reporting. The main objective of the study is to assess the suitability of’ International Financial Reporting Standards (IFRS) for emerging market such as Qatar; specifically, the current research explore advantages and disadvantages of IFRS implementation in Qatar.From the prior studies perspective, we found that IFRS is suitable for Qatar for many reasons. First of all, most of the companies in Qatar are characterized by insider dominated ownership structure. Therefore, majority of the shares are owned by the family owners. Also, the influences of institutional investors are in a greater margin in Qatari Stock Market. Moreover, the code of corporate governance in Qatar was just implemented three years back in 2009. As discussed earlier, the law system in Qatar is also very weak in regard to financial reporting. In these circumstances, IFRS can play a big role in Qatar since it is an advanced reporting standard developed and it could ensure that all the information are there for the shareholders and no asymmetric information situation could happen and ensures the rights of individual shareholders. Since Qatar is undergoing major development for the World Cup 2022 and National Vision 2030, it is important for Qatar to attract foreign investors for capital market. IFRS implementation will help Qatar to ensure foreign investors in gaining confidence in Qatari capital market. Furthermore, Qatar has adopted IFRS in 1995 and before that no specific requirement was that which is more established and strictly adopted by the companies. Therefore, Qatar didn't face a lot of issues while the adoption process. However, countries like Australia, Spain who were having their own developed standard faced a lot of issue since they were having their own standard practiced for a period of time.Thus, the current study concluded that IFRS implementation is suitable for the economy of Qatar considering its benefits, Qatari corporate ownership structure and commercial law of Qatar. Although, Qatar is following IFRS without any amendments by considering their own culture, economic environment and corporate governance, however, their implementation was very strong with the existence of big four international audit firm and regulation from Qatar Central Bank and Qatar Financial Market Authority. Furthermore, many of the Qatari companies such as QTEL, QNB are listed in internationally in various stock exchanges because they are following IFRS for their financial report. Finally, we conclude saying that, despite come short coming are there, it is beneficial to adopt IFRS for an emerging country like Qatar.

Synopsis The research problem This paper examined whether firms’ decision to switch from the International Financial Reporting Standards (IFRS) to the new Generally Accepted Accounting Practice in the United Kingdom (New UK GAAP) affects their audit fees. Motivation The New UK GAAP was introduced by the UK regulators to enhance the comparability of financial reports and to reduce the high financial reporting costs associated with IFRS. We aimed to provide evidence on whether the reduced frameworks of IFRS, like the New UK GAAP, are a more cost-effective option. Furthermore, only very few studies analyzed the impact of abandoning IFRS on audit fees, and these found inconsistent results using the public firm data. We aimed to extend the current literature by using the private firm data. The test hypotheses Our first set of hypotheses considered whether the switch from IFRS to the New UK GAAP is associated with audit fees. Our second hypothesis tested whether there is a difference in any such association between larger and smaller firms. Target population We focused on the UK private (i.e., nonlisted) firms that have previously voluntarily adopted the IFRS. Adopted methodology We used regression analyses, difference-in-differences (DID) analyses, various matching methods for robustness, and analyses of firms’ financial reports. Analyses Using the UK private (i.e., nonlisted) firm data for the period 2014–2019, we examined the impact of switching from IFRS to the New UK GAAP on audit fees. The data for regression and DID analyses were obtained from the FAME database. We also downloaded the financial reports of two firms from Companies House to analyze the differences in their reports before and after the switch to the New UK GAAP. Findings We found that firms’ decision to switch from IFRS to the New UK GAAP significantly reduced their audit fees, with larger firms experiencing an additional reduction in their audit fees following the switch. Through examining the real examples of firms’ financial reports, we found consistent evidence that firms turning away from IFRS did take advantage of the disclosure exemptions contained within the New UK GAAP, resulting in reduced disclosure, which may explain the reduced audit fees. Overall, our findings suggest that using full IFRS may still be burdensome for the sampled firms that previously voluntarily adopted the IFRS. The findings also imply that an accounting standard consistent with IFRS but requiring less disclosure, such as the New UK GAAP or the IFRS for Small and Medium-sized Entities, may be welcomed by practitioners and represents a useful alternative for standard setters.

International Financial Reporting Standards (IFRS) consist of accounting rules that determine how transactions and other accounting events should be reflected in the financial statements. They are designed to maintain credibility and transparency in the financial world, enabling investors and business operators to make informed financial decisions. The role of international financial reporting standards is to generate the most reliable information about an organisation's financial condition and financial performance. Reporting acts as a means of communication within national and international markets. Globalization adds significance to the convergence with IFRS, as financial reports prepared according to national standards do not satisfy the needs and interests of users and decision-makers. This article describes the benefits and challenges associated with IFRS implementation and compliance. Considering the favourable bonuses that IFRS is expected to bring and the challenges companies face in adopting and continuously complying with IFRS, it is essential to discuss the theoretical and empirical studies performed pre and post-implementation of the standards under discussion. The current research paper is designed to analyze the existing literature on the benefits and challenges of IFRS adoption as a part of the unification of the financial reporting process.

1. Introduction In a highly volatile economic environment, like the one we are facing nowadays, there is a need, increasing day by day, for adequate and reliable information from companies of all economic sectors, in a way that everyone would be able to extract the maximum and conclusions. However, emphasis is given to the banking sector, and that's because banks are considered as the cornerstone of the financial support system especially in periods that economies collapsing, like nowadays. Businesses face the problem of sustainability rather than inconsistency in standard operations and practices. An important issue critical in making appropriate decisions of financial/ investing content (and not only) is the production and disclosure of reliable information to the user's which must be provided (offered) by every business sector of the economy (Choi and Meek, 2010). Views and opinions of professional and scientific Unions and Associations concerning the true financial position, appropriately defined outcomes ',' full disclosure ',' required disclosures, etc., are timely and widespread these days, while the relatively recent introduction and application of IFRS in the world demonstrates the need for adjusting these positions and views (Alkafagi, 2010). The present study focuses on this subject examining the degree of adequacy of the provided financial reporting on significant disclosures required by International Financial Reporting Standards. The survey is based on an analysis of the financial figures in conjunction with application of these Standards and in light of the basic accounting principle of fair view. 2. The Proper Meaning of Fair View Financial statements should provide essential information to any interested user of financial information in order to be able to extract a reliable and picture relevant to the financial position of its company. The international mandatory application of IFRS is a practical demonstration of the latest effort to ensure quality information. The overriding purpose of the application of IFRS is to ensure the implementation of the fair of business on the property structure, financial position and profit or loss. In particular, the principle is that the basic objective of financial statements is to show very clearly the fair of the asset structure, financial position and profit or loss (MacKenzie, 2010). In particular, the principle of view requires: a) The balance sheet includes all assets and liabilities, the company had at the time of the balance sheet. We should not, ie the balance sheet includes fewer or more assets and liabilities than the company possess in reality. Also, that the funds in the account income actually incurred under the generally accepted accounting principles. b) The balance of the funds generated by and accurate quantities after specific valuation in accordance with the provisions laid down by law. c) The aggregate balance of the funds came from aggregating uniform homogenous sub-funds. d) The funds are properly called, ie the titles of the bills reflect the content. e) The assets shown in the balance sheet based on the degree of liquidation, while the liabilities according to their degree of maturity, in order to result from the balance sheet the financial position of the company. The picture under the light of other accounting principles does not coincide with objective truth because in some cases basic deviations from this principle appear. Thus, the rules for valuing assets are governed by the principle of prudence and do not reflect the value of things (fixed assets at historical cost, the inventories at the lower price between purchase price and current price, etc). From the foregoing discussion it comes up that this principle establishes the absolute but not the actual picture that emerges on the basis of generally accepted accounting principles. …

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The global wind of economic integration has now reached the doorstep of accounting profession with intense pressure on nations state to apply unified accounting Standards in government undertakings. This effort could be seen as a centaury reform to the profession. The reform agenda was perceived as way forward towards harmonizing public sector with private sector liked system and principle of financial reporting, which for long experts had been advocating on the believed that both sectors should operate at the same level of efficiency. The need for high quality standards to enhance sound and consistent financial reporting and the fact that the inefficiency and ineffectiveness of public sector extended to a belief that public and private sectors did not have to be managed in fundamentally different ways, fostered a wide-ranging discussion about the harmonization of public sector accounting systems and their convergence towards the private sector financial reporting standards. There is no doubt that applying universal high quality standards can promote efficiency, transparency which in long run may promote public accountability. However, the process of adopting a uniform set of accounting standards, as a part of the international convergence of financial reporting systems, is perceived as a very complex, time consuming and difficult task. The trend of international convergence and harmonization policy of private sector accounting and financial reporting standards has also made the influence on the process of entire public sector reform that has been progressing worldwide. According to Ball (2006), since accounting is shaped by economic and political factors, harmonization of accounting standards and practices is almost an inevitable consequence of the increasing integration of markets and policies. This has been witnessed by the mandatory adoption of the International Financial Reporting Standards (IFRS) in several countries in the last decade. The International Accounting Standards Board (IASB) is a private organization of international scope established in 1973. It has issued a set of standards to be used when preparing financial statements, namely 41 International Accounting Standards (IAS) and 13 International Financial Reporting Standards (IFRS). The IAS are standards issued by the IASB by 2001 and IFRS are standards issued after that year. Nevertheless, currently, the expression IFRS is commonly used alone to designate this set of rules (IAS and IFRS). This IFRS adoption worldwide is a significant economic transformation and it gave rise to a major line of research. This paper reviews the empirical literature on the effects of IFRS adoption on financial management and economic transformation with the focus on Cameroon. Empirical research allows evaluating the impact of changing standards on the financial reporting quality, as well as the effects of such a change on the capital market (Douala Stock Exchange), it can also contribute to understanding the factors that influence the consequences of change. This knowledge is important for regulators in Cameroon that are preparing to change standards, but also for national regulators that have already done it when considering ways to improve IFRS implementation. This paper will revisit some cases studies encouraging the implementation of IFRS and IPSAS worldwide and attempt to domesticate the concepts in Cameroon. The first part provides the rationale of IFRS and IPSAS implementation, while the second part gives some international cases studies on IFRS implementation. The last part of the paper gives a roadmap for effective and efficient implementation of IFRS in Cameroon.