Abstract
In the modern process of globalization, IFRS standards are widely used in the financial world, Russian Federation is one of these examples. The application of IFRS in Russian Federation first began in the early 90-ies of the twentieth century. During IFRS adoption many companies were involved in this process. Nowadays, a big part of all Russian companies obligatory use IFRS standards to prepare their statements. The purpose of this article is to analyse current practices of financial reporting procedures, its compliance with the rules of the IAS 1 as well as identifying the dependencies between the auditor selection and the quality of reporting. For this paper, a special Questionnaire was developed and for each selected organization a special profile, which included analysis of all financial statements for the period of the 2015 year was created. The study shows that the financial reports quality of the largest Russian companies on a high level. However, many companies face the problem of RAS and IFRS differences during reports transformation that directly influences its quality. During the study process it becomes clear, that auditor has a direct impact on the financial statements quality.
Highlights
The application of International Financial Reporting Standards (IFRS) aims at achieving transparency of the company’s activity, as well as it creates the opportunity to make reasonable managerial decisions, estimate the financial condition and implement forecasts
The first obligatory using of IFRS started from the letter of Central Bank of the Russian Federation (No 181-T from 25.12.2003) by which all companies in the banking sector had to prepare financial statements in accordance with IFRS starting from January 2004
The analysis of the financial reports quality allows to make following conclusions: Structure of all financial statements has a good quality, but some of the companies do not divide long-term debt on long-term debt and current portion of long-term debt and do not classify cash flows from operating activities; All statements include minimum line items in accordance with the IAS 1 and 85% of all companies including additional line items in their reports; Information about share capital has the different level of disclosure
Summary
The application of International Financial Reporting Standards (IFRS) aims at achieving transparency of the company’s activity, as well as it creates the opportunity to make reasonable managerial decisions, estimate the financial condition and implement forecasts. One of the first Russian companies that have prepared financial statements in accordance with IFRS were JSC "Avtovaz" (1994) and JSC "Gazprom" (1996). The first obligatory using of IFRS started from the letter of Central Bank of the Russian Federation (No 181-T from 25.12.2003) by which all companies in the banking sector had to prepare financial statements in accordance with IFRS starting from January 2004. Open joint stock companies whose shares were traded on the securities markets started to prepare quarterly and annual financial statements in accordance with IFRS or US GAAP from January 2005 (order No 05-5/PZ-n from 16.03.2005 of the Federal Service for Financial Markets of Russia). Since January 2007 the companies issuing debt instruments began to prepare financial statements in accordance with IFRS or US GAAP. In 2011 Russian Federation recognized the first 63 IFRS standards and interpretations for them
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
