GLOBAL ACCOUNTING REGULATION: IMPACT OF IFAC ON FINANCIAL REPORTING QUALITY

Ayeni Popoola,Ibitoye Temitope,Aina Adeyemi

doi:10.29121/ijetmr.v4.i8.2017.76

Abstract

This paper provides an analysis of various dimensions of accounting and corporate governance that have led to the currently troubling state of affairs in the financial reporting environment. Good Corporate Governance (GCG) is a mandatory requirement in today’s corporate world by every stakeholder groups. Failure of giant corporate groups in the last twothree decades strengthens the demand further. And surprisingly, in some of such failures, accounting as a discipline is held liable. The way accounting is practiced or the interpretations that may give different prescriptions in similar situations are some dark areas that may open some scope for the corrupted accountants. The paper covers the concept of corporate governance, its legal framework, its current status and how accounting may be practiced to protect corporates from corruption by establishing governance. The paper analyzes how IFAC is succeeding as an international standard setter with an established place in the global financial infrastructure and it reveals a growing reliance on governance by experts together with a growth in influence of the large, multinational accounting firms. Until corporate boards are truly independent of corporate management and are knowledgeable enough to act as effective shareholder advocates, changes in accounting will be of limited impact.

Highlights

In today's global financial arena, it is important to subject the developing governance arrangements of global regulatory bodies to adequate scrutiny and to ensure that the histories of their development are not lost or written only by those implementing such changes (Humphrey et al, 2006)
International Federation of Accountants (IFAC) may not be seen as deserving special attention if it is classified as just another case of a professional body using declarations of commitments to the public interest, transparency and accountability as “a convenient mechanism for avoiding criticism and maintaining the power and privilege of delegated self‐regulation” (Sikka, 2001)
In this study the effect of corporate governance attributes on financial reporting quality in firms listed in Stock Exchange is investigated during the period of 2008 to 2015

Summary

Introduction

In today's global financial arena, it is important to subject the developing governance arrangements of global regulatory bodies to adequate scrutiny and to ensure that the histories of their development are not lost or written only by those implementing such changes (Humphrey et al, 2006). IFAC may not be seen as deserving special attention if it is classified as just another case of a professional body using declarations of commitments to the public interest, transparency and accountability as “a convenient mechanism for avoiding criticism and maintaining the power and privilege of delegated self‐regulation” (Sikka, 2001) Such a perspective, though, ignores the fact that we are currently at a very important time in the shaping and formation of what is becoming known as the global financial infrastructure – and that bodies operating within this arena, such as IFAC, have experienced major change in its authority and jurisdictional significance in recent years

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