Financial Reporting Practices in the Insurance Company in Bangladesh: An Evaluation of the Implementation of IFRS 4, Insurance Contract

Abstract

The wave of globalization has touched in every edge of the world and also proceeds in business world. Business uses accounting standard for preparing financial statements to examine the purpose of it. Financial globalization proceeds, International Financial Standard are increasingly becoming important instruments of integration. Meanwhile, International Financial Reporting Standards (IFRS) provides evidence of accounting quality for economic consequences. IFRS argues the purpose of financial reporting is essential to reduce information asymmetry between corporate manager of companies and parties contracting with firm. This has been observed in development countries whose are leading engine in the world. Different renowned economic forum and organization reinforced the influence of implementation of IFRS in which they called global accounting standards by 2011. By the end of 2008, there were over 100 countries that had adopted IFRS. Among IFRSs, IFRS 4 requires insurance contract to comply with international accounting standards for financial reporting in order to give improvements to accounting practice and to understand the salient aspects that are related to insurance company.