National Accounting Standards Research Articles

МЕТОДИ ОБЛІКУ З МЕТОЮ СКЛАДАННЯ ФІНАНСОВОЇ ЗВІТНОСТІ: НАЦІОНАЛЬНИЙ ТА МІЖНАРОДНИЙ АСПЕКТИ

The article examines accounting methods for the purpose of financial reporting using the example of national and global application of rules and standards. General research methods were used: analysis, synthesis, comparison and grouping, schematic display of results. The research methodology takes into account a generalization of domestic and foreign features of accounting methods and methods for preparing financial statements, scientific analysis of standards of accounting methods, fundamental provisions of economic theory, accounting and reporting. A comparison of accounting approaches according to NP(S)BU 1 "General Requirements for Financial Reporting" and International Financial Reporting Standards IAS 1 "Presentation of Financial Statements" was carried out to assess the state of national accounting methods with world practice. Separate measures are proposed to systematize methods for preparing financial statements. The need to take into account the characteristics and essence of individual species using the modeling method is substantiated, which will allow generating reporting in conditions close to international standards. The results of the study can be useful for further approximation of the conditions and features of the application of accounting and reporting methods according to national to international standards. The study analyzed and summarized the state of regulatory regulation of the application of accounting methods for the preparation of financial statements, taking into account national and international aspects. It has been determined that the accounting method is a system of interrelated methods and techniques for displaying the value of objects. Accounting methods are general scientific and specific, and it is the latter that are the object of regulatory regulation at both the national and international levels. It is noted that national accounting standards should take into account all methods that contribute to the preparation of financial statements close to international standards. For the current state of accounting science and practice, taking into account the achievements of foreign standards of accounting and reporting, the most practical direction of improving methods is the use of the modeling method. The issues of accounting and reporting need further study through the prism of the elements of the accounting method reflected in the accounting policy.

Міжнародний досвід бухгалтерського обліку маркетингових витрат

The international aspects of marketing cost accounting cover various approaches and practices that influence companies’ management decisions and financial reporting worldwide. Implementing International Financial Reporting Standards (IFRS) ensures the unification of methods for recognizing and classifying marketing expenses, contributing to transparency and comparability of financial and non-financial data. Different countries adapt these standards to their economic and regulatory characteristics, leading to variations in accounting practice. Analysis of international experience allows business entities to improve management strategies and increase cost efficiency. Studying these aspects is critical to ensuring competitiveness and stability in the global business environment. The article aims to summarize the priority international approaches to the recognition and measurement of marketing expenses in financial statements. The study used deduction, analysis, synthesis, and generalization methods. It is established that the primary documents regulating the accounting treatment of marketing costs include IAS 38 «Intangible Assets» (for capitalization of marketing costs, if justified) and IAS 15 «Revenue from Contracts with Customers» (for advertising and promotion costs related to contracts). One of the most promising types of marketing in today’s conditions is digital, which is confirmed by the amount of financing in European countries. The international standards governing the accounting of marketing costs are generalized. The results obtained can be used to improve domestic UAS and develop internal regulations for business entities. We see promising areas for further research in studying the issues of consistency between international and national accounting standards to identify common and distinctive features and areas for improving domestic regulations, as well as developing primary and reporting forms that will allow an objective reflection of their financial basis and serve as an essential source of data for management personnel. Keywords: marketing expenses, accounting, IFRS, marketing, advertising.

Framework for Enhancing the Egyptian Accounting Standards Towards Convergence With International Financial Reporting Standards

The Generally Accepted Accounting Principles (GAAP) which are theoretically unique to each country, it provides standards for evaluating and comparing the financial position of companies. However, the International Accounting Standard (IAS), are developed to be used by all countries. The convergence of these national and international accounting standards is important for attracting foreign investors and potential domestic investors. Egypt has undergone serious steps towards convergence, such as the introduction of new standards or converging of old standards to be consistent with the international standards. A number of complex standards has been understood either by separating them into two or more standards or by adding supplements or guidelines to some of them. Alternatives of some of accounting standards are reduced to avoid differences in practices and manipulating profits. This research developed a framework towards convergence of Egyptian accounting standards and International accounting standard that include a number of viable points: started with determining the objective of the financial reports, determining the methods of applying the international standards, the importance of studying the cultural influence, developing accounting education, the need to develop professional organizations concerned with the profession of accounting and for implementing and follow-up of standards. Keywords: International accounting standard, convergence, Generally Accepted Accounting Principles, Egypt.

ВИЗНАННЯ ЗАБЕЗПЕЧЕНЬ У ВІТЧИЗНЯНІЙ І МІЖНАРОДНІЙ ПРАКТИЦІ ОБЛІКУ І ЗВІТНОСТІ

Introduction. Provisioning is the process of setting aside an amount that may be necessary to settle a possible obligation when neither the amount nor the date of the obligation can be estimated with certainty. The objective of accounting and reporting in this area is to establish provisions and to choose the best option for making such provisions. Due to their dynamic nature, liabilities significantly affect the solvency of a business entity, require effective cash flow management and control over the actual status of settlements. The purpose of this article is to study the main aspects of recognising collateral, covering domestic and international accounting and reporting practices. Methods. In the course of the study, the following methods were used: monographic method for studying the literature on the recognition of collateral; method of regulatory support for assessing the established rules and regulations on collateral; analytical method for analytical assessment of the justification of collateral. Results. The creation of collateral is a necessity determined by current legislation and regulations. However, the list of collateral provided in National Accounting Standards 11 is not exhaustive, as an entity should create collateral to reimburse any future expenses (of course, subject to the recognition conditions). Taking into account the specifics of the entities' business, various circumstances may arise that will lead to the emergence and recognition of provisions, which in turn requires careful analysis and justification. Conclusions. Based on the study of the conditions for the formation of collateral in the accounting system and the tasks of accounting and management of enterprises, it is advisable to involve qualified specialists and managers to justify the recognition of collateral. Also, the order on accounting policy should reflect information on the types of payments for which a specific provision is formed. It is recommended to improve the wording of the criteria for recognising collateral in accounting, which will facilitate the convergence of National Accounting Standards 11 and IAS 37.

Financial Reporting, Criminal-Juridical Protection, And Corruption in Albania

Purpose: The purpose of this paper is role of financial reporting and the accounting profession in the identification of corruption what is foreseen in the Criminal Code of the Republic of Albania regarding the activity of businesses that violate financial reporting in accordance with accounting standards, how they stand against each other with the aim of a true and fair view of the activities of each entity. Methods: This paper comes as an empirical study of the regulatory framework in Albania in the field of financial reporting and criminal-juridical protection provided in under Criminal Code of the Republic of Albania, as two influential indicators in the wide discussed phenomenon of corruption in our country. The study employs a combination of qualitative and quantitative methodologies. Through empirical and statistical analysis, the actuality in Albania will be understood in the trinomial of financial reporting, criminal-juridical protection, and corruption. At the end, suggestions for the main actors will be presented for the role of financial reporting in the fight against corruption and organized crime, identifying it as a main tool. Results and Discussion: Corruption and organized crime are increasingly finding themselves in many dimensions in the world of globalization and information technology development. Through the "Action plan for fighting corruption and economic crime" (2022), IFAC has provided a framework for how to improve the role of the accounting profession in the fight against corruption, aiming for alignment with the UN SDGs. In this context, Albania has also undertaken its reforms in several areas, such as in the field of financial reporting, justice, etc., focusing on strengthening institutions, increasing public trust, and involving professionals with integrity and an elevated level of professionalism. Implications of the Research: Albania has been working for a long time now to align its legislation with that of the EU, in the framework of EU Integration. Among other areas, there have been a lot of developments toward the harmonization of the legal framework in the field of accounting and audit profession regulation. One of the crucial points in financial information publication is the process of preparation and auditing of financial statements. The legal framework altogether with the reporting standards should aim to encourage the publication of a true and fair view of financial information. It is recommended that the accounting professionals should show caution to prepare financial statements in accordance with national accounting standards, or international financial reporting standards evidencing the true and fair view of the entity's activity. Originality/Value: This paper presents the effect of financial reporting and criminal-juridical protection on the level of corruption in Albania. This goal is achieved by evidencing statistical data on economic entities operating in our country, describing an analysis of criminal-juridical protection provided for in the Criminal Code in force in the Republic of Albania, as well as based on a literature studied to understand how the financial reporting of entities is an important instrument for identifying corruption and what is foreseen in this criminal offense, as a means of preventing corruption and conducting business activity in accordance with legal acts.

СУТНІСНО-АНАЛІТИЧНІ ХАРАКТЕРИСТИКИ ПОДАТКОВОГО БОРГУ В УКРАЇНІ

The substantiation of the essential content and the identification of trends in the growth/decrease of the tax debt is relevant in all countries of the world, since it cannot be completely eradicated in any country in the world, therefore one or another measures are taken to reduce it (voluntary and forced). For Ukraine, the question of the existence of tax debt is particularly relevant, as its volume increases annually. The article is devoted to deepening the theoretical foundations of the tax debt, highlighting its essential characteristics, as well as conducting an analysis of the tax debt in Ukraine and determining the reasons for its growth. The specificity of the scientific tasks, which are the subject of the research, required the use of a complex of special methods, the application of which helped to analyze the essence of the tax debt, to isolate its specific characteristics, and to conduct an analysis of its dynamics and structure in Ukraine. The article considers approaches to the interpretation of the content of tax debt. The first approach is based on domestic legislation, national accounting standards and the inevitable onset of liability for violation of tax discipline. The second approach is based on the behavior of the taxpayer, who makes a conscious decision to not pay his tax liability and takes responsibility for the violation of tax legislation in the form of fines and penalties. The author's definition of tax debt is proposed, which not only defines its content, but also contains the reasons and consequences of its existence. The essential characteristics of the tax debt, which relate to the non-fulfillment of the tax obligation by taxpayers, the reasons and results of its non-fulfilment, the need to agree on the monetary obligations of taxpayers, as well as the consequences of the existence of a tax debt for all participants in tax relations, are substantiated. As a result of the conducted analysis, it was established that in recent years in Ukraine, despite the constant improvement of tax legislation and the simplification of tax administration procedures, tax debt continues to accumulate. It was established that in order to reduce the amount of tax debt, it is necessary to carry out various measures of influence on taxpayers by the controlling bodies. For honest taxpayers, it is worth applying incentive measures in the form of exemption from tax audits for a certain period, and for dishonest taxpayers who have a tax debt, it is advisable to increase the responsibility for committing an offense.

ACCOUNTING IN UZBEKISTAN BASED ON INTERNATIONAL FINANCIAL REPORTING STANDARDS (as exemplified by intangible assets)

The article is devoted to the consideration of the problems arising in the process of globalization and experienced in adjusting the National Accounting Standards (NAS) in Uzbekistan, including the standard related to intangible assets, in compliance with the International Financial Reporting Standards (IFRS), as well as the solutions proposed thereof. Herewith the author proposes the recommendations worked out for recognition of intangible assets, assessment of book value, the method of calculating amortization, revaluation model, the order of disclosure of information on intangible assets in the financial statements in accordance with international standards (IFRS 38). Moreover, there some considerations on the revaluation model of intangible assets to assess their impact on initial value, amortization, long-term and total assets.

ВИТРАТИ І ВИДАТКИ: СУТНІСТЬ, ОСОБЛИВОСТІ ОБЛІКУ ТА АНАЛІЗУ

State financing requires control over the availability and movement of budget funds, the implementation of estimates, therefore it can be argued that the most important objects of accounting and analysis of the activities of budget institutions are costs and expenses. The article presents a theoretical generalization and solution of the scientific task, which consists in the study of the economic essence, features of accounting and analysis of costs and expenses in budgetary institutions. It was determined that the demarcation of the essence of the researched concepts is based on the change in the forms of resource use in the process of functioning of the budget institution. Peculiarities of regulatory and legal regulation of cost and expenditure accounting are considered. It is emphasized that the term "costs" is disclosed in national and international accounting standards and other legal documents, and "expenses" – in regulatory documents regulating the budget process; expense accounting is conducted using the accrual method, and budget expenditures – using the cash method. It is indicated on which accounts and in which registers of analytical accounting the costs and expenses of budgetary institutions are recorded. The directions of classification of expenses and costs of budgetary institutions are revealed, taking into account the current budget classification (functional, departmental, economic, programmatic). It is emphasized that the purpose of controlling costs and expenses is to establish their legality, reliability and expediency and the correctness of displaying relevant economic transactions in accounting, and the main purpose of their analysis is to find reserves for reducing the costs of budget institutions. Methods of economic analysis of costs and expenses of budget institutions are disclosed and characteristics are presented, which allow to identify reserves for increasing the efficiency of the use of labor, material and non-material resources, as well as budget funds used by budget institutions.

До питання сутності загальновиробничих витрат підприємства та управління ними

The article summarizes the content of general production costs, their specific composition, the order of distribution of general production costs (on the example of specific situational material), the order of reflection in accounting of the distribution of general production costs, the functions of strategic management of general production costs. The aim of the article is to study the topical aspects of formation and distribution of general production costs of enterprise, optimization of the level of general production costs in the context of their planning, analysis and control. Further, the general production costs associated with the organization, management, maintenance and control of the production activities of the enterprise as a whole. In order to avoid an arbitrary interpretation of general production costs, they are standardized with the help of National Accounting Standards (NP(S)BO 16 «Costs»). These costs form the production self-cost are the basic indicator of the enterprise’s activity, which affects the profitability of its activities. The formation of such costs is carried out in compliance with the current sectoral procedure for their accumulation and distribution (in compliance with the provisions of the Methodological Recommendations for the formation of the self-cost of production). These costs are subject to distribution. The distribution base can be: hours of labor, wages, volume of activities, direct costs, land areas, etc. General production costs are divided into: fixed and variable. The list of fixed and variable general production costs is determined by the enterprise within the framework of the approved accounting policy. Since some of the general production costs are mixed or it is difficult to distinguish either fixed or variable costs for them, individual enterprises do not carry out such a division and, accordingly, fully distribute them according to the selected distribution base, based on the actual capacity. In production, the distribution of general production costs is carried out between the main products. Among the main methods that can be used for cost distribution are the following: direct distribution; distribution based on production volume; distribution based on the cost of materials; distribution on the basis of labor; capacity-based distribution. The use of these methods involves the choice of a single base for the distribution of general production costs, which is based on the consideration that costs are written off (distributed) by types of products on the basis of a single standard – the coefficient of distribution of general production costs or the cost rate. Accounting for these costs is carried out through account 91 «General production costs». The article provides an example of the distribution of general production costs. The functions of strategic management of general production costs (planning, implementation of parameters laid down in the plan, efficiency control, analysis of results and feedback) are generalized. The introduction of these functions will make it possible to identify energy- and material-intensive units and, as a result, to control the use of material, labor, and financial resources.

The puzzling association between accounting conservatism and corporate social responsibility

PurposeThe purpose of this paper is to focus on exploring the mutual impact of accounting conservatism and corporate social responsibility (CSR).Design/methodology/approachTo empirically assess the theoretical arguments the authors estimate a simultaneous equations system for accounting conservatism and corporate social responsibility determination by two-stage least squares in a sample of 175 firms listed on the Tehran Stock Exchange (TSE) for the period 2009–2019.FindingsThe results of the present study showed that accountability in companies listed on the TSE has led to an increase in the use of conservative practices. Therefore arguably, companies that seek CSR activities are more conservative in preparing and presenting financial reports. Also, companies that engage in conservative practices for the benefit of stakeholders are better able to implement CSR activities to meet stakeholder obligations. These results show a two-way relationship between CSR and accounting conservatism.Practical implicationsAccording to the results obtained from this study and the elimination of conservatism from the qualitative features of financial reporting in International Accounting Standards, it is recommended for the trustees and authorities of national accounting standards to decide whether this qualitative feature is effective or not.Originality/valueFurthermore, the findings of this study suggest that the application of corporate social responsibility theories calls for more inquiry.

MODELS OF COST BEHAVIOUR: A MANAGERIAL PERSPECTIVE

The paper considers the peculiarities of cost behaviour in the production of metallurgical products and their modelling. The industry specifics and their impact on cost formation and production of metallurgical products are assessed. The article develops step-by-step approaches to cost behaviour analysis. It is proved that one of the key aspects of the study of cost behaviour is the choice of an effective method of their accounting and calculation The main factors of external and internal direction of cost behaviour are formed. Peculiarities of application of the preliminary method of production are evaluated. The scheme of formation of accounting and analytical reflection of production of metallurgical products by the preliminary method at PJSC "Kamet-Stal" is developed. The accounting and analytical reflection of formation of the production cost of metallurgical products on the accounts is presented. The emphasis is placed on the peculiarities of accounting for the formation of the production cost of metallurgical products according to national accounting standards (regulations). A set of interrelated factors that shape and influence the behaviour of costs has been formed. It has been concluded that the most objective method for assessing cost behaviour is statistical correlation models. A regression equation as a linear model of cost behaviour has been formed. A linear model of cost behaviour has been calculated. The equation parameters, actual and tabulated coefficient of determination are determined. The relationship between the volume of pig iron production and changes in total fixed costs is substantiated. The closeness and significance of the relationship are estimated. Analytical conclusions are formed and the main directions of the cost management strategy are developed. It is proposed to forecast costs using the tested model. It has been concluded that the developed model of cost behaviour of metallurgical products (liquid cast iron) can be useful in the practical activities of an enterprise for making effective management decisions in both the short and long term.

Assetization as a mode of techno-economic governance: Knowledge, education and personal data in the UN's System of National Accounts

Assets are made through the configuration of technoscientific and political-economic (or techno-economic) relations, claims and practices; a process increasingly conceptualized as ‘assetization’. The UN’s System of National Accounts (SNA) – a set of national accounting standards – defines assets as ‘entities that must be owned by some unit, or units, and from which economic benefits are derived by their owner(s) by holding or using them over a period of time’. Accounting standards like the SNA are implicated in the construction of assets through their ‘extension of the asset boundary’, which happens periodically as accounting standards are revised and updated to better reflect changing business practices. Assetization, then, entails more than an analysis of the transformation of something into an asset, it can also be conceptualized as a mode of governance in which social actors change their world. To make this argument, I examine the SNA’s treatment of knowledge, education and personal data: respectively, redefined as an asset (e.g. intellectual property product); treated as a quasi-asset (e.g. human capital); and subject to continued debate (e.g. digital data). In exploring the SNA’s accounting standards, I show how assetization reconfigures the governance of knowledge, education and personal data, often in problematic ways.

ASSIGNED ASSET VALUE AND INVESTMENT TAX DEDUCTION: DEFERRED TAX ACCOUNTING PROBLEMS

The paper deals with methodological and theoretical aspects of accounting for investment tax deduction and assigned value of the asset in terms of rules and regulations of international standards and national standards of the United States (US GAAP). The problem of imperfection of IAS 12 «Income Taxes» in the part of accounting of deferred taxes at initial recognition of the asset is raised. The peculiarities of valuation at fair value when tax effects are included in the amortized value of the asset are disclosed. The calculation of the assigned value of the asset and deferred tax for investment tax deduction, as well as their accounting on accounting accounts is substantiated. The results of the work can be useful in improving national accounting standards and developing corporate accounting policies, as well as in the framework of related theoretical research. As promising directions in the field of the research topic can be highlighted a comparative analysis of the Russian investment tax deduction with the American investment tax credit; and methodological approaches to accounting for the latter in the U.S. in the 1960s.

Enterprise Costs: Essence and Management Features in Modern Conditions

Purpose: The objective of the article is the study of theoretical provisions and the development of practical recommendations for improving the company's cost management methodology. Design / Methodology / Approach: The following methods were used in the research process: methods of induction and deduction, the method of comparison, the method of generalization – to reveal and clarify the economic essence of costs; system approach – to build a system of cost management of the enterprise; statistical research methods – to assess the structure and dynamics of enterprise costs; graphic – for a visual presentation of research results. Findings: The article examines the economic essence of enterprise costs through the prism of national and international accounting standards. The composition and structure of the company's costs were diagnosed and the factors that influenced their change were analyzed. The theoretical and methodological aspects of enterprise cost management are justified. Originality / Value: The scientific novelty of the obtained results lies in the identification and disclosure of directions for improving the company’s cost management methodology. It has been proven that cost management of an enterprise is a complex and dynamic process that involves achieving a high economic result of its operation. Practical Meaning: The practical significance lies in certain places and the role of costs in achieving production efficiency. It has been established that in order to form an effective cost management system for an enterprise, it is necessary to develop a management strategy, record and analyze costs in terms of their volume, dynamics, structure and responsibility centers, as well as identify trends in the level, volume and structure of costs per unit of output. Further Research: For the correct choice of the cost optimization method, it is necessary to take into account external and internal factors, the determination and assessment of the impact of which on the company’s costs are areas of further research.

Economics in primary schools: an empirical experiment from Hungary

The paper highlights the importance and relevance of introducing economic studies to primary schools. The research aimed to investigate the appropriate age, environment, type, and composition of presentation for introducing combined economic knowledge. The 190 students participating in the research were students from three primary schools in Hungary from 10 classes. Given the fact that in the case of all of the significant results, a sufficient effect size could be measured, and furthermore, the relevant test value was very high, it is unambiguously proven that the size of the sample (n = 190) that was used for the examination was sufficient. The results suggest that teaching economic and financial knowledge through accounting and making lectures interactive using special tools of positive education is critical to stimulating children’s interest. Eighty percent of the students in the study liked the combined and interactive lecture. Another goal was to investigate whether those that liked the presentation would perform better on the related knowledge test, which proved to be the case. In the two target groups, students in grade 6 outperformed students in grade 3 on the test. An investigation of gender performance is also included in the research. Findings suggest that the respective education may appropriately be developed based on the close relationship between mathematics and accounting. The lectures can be adapted according to any national or international accounting standards (IFRS, etc.) and can be taught in an online classroom as well. The lectures aim to develop children’s independent problem-solving skills so they can adapt the information to their own lives and financial situations. The paper fills a gap in the research by describing a successful attempt to complex economic literacy.JEL Classification codeA29, M21, M41

Financial Results of Ukrainian Enterprises: Peculiarities of Accounting Support for their Formation and Management

The theoretical foundations and features of accounting support for the formation of financial results of Ukrainian enterprises have been studied, taking into account the requirements of national legislation and international accounting standards. The system of accounting accounts for recording the formation of the financial result of enterprises is characterized. The study of the differences in the rules for calculating the financial result of enterprises and private enterprises, recognition of their income and expenses was deepened. The influence of the financial result on taxation (income tax and single tax) is analyzed. A detailed analysis of the composition of income and expenses for operating and non-operating activities and notes to financial statements made it possible to establish that the main determining factor in the formation of income is the net income from the sale of products (goods, works, services) and net earned insurance premiums, while the formation of expenses is operational expenses of Ukrainian enterprises.

A Study of Recent Accounting Trends in India's Corporate Sector with Special Reference to International Financial Reporting Standards

Accounting is the process of keeping track of monetary transactions and data in a structured, consistent, and understandable style so that stakeholders in a business or organization may make informed economic decisions. Early forms of accounting used clay tokens to keep track of products and livestock, but the discipline has since evolved into a sophisticated system for recording a wide variety of financial transactions and details. The first step toward IAS, or International Accounting Standards, was done in 1959. Since then, accounting groups and others have collaborated to form the International Accounting Standards Committee. In 1997, the IASC was restructured to better enable the convergence of various national accounting standards and practices toward a single, high-quality set of global accounting standards. Established in 1973, it issued the foundational documents for what is now known as International Accounting Standards until the year 2000. As the International Accounting Standards Committee (IASC) was abolished in 2001, the International Accounting Standards Board (IASB) was tasked with publishing international accounting standards. The integration of global financial markets and the need of investors for more uniformity in the financial reports of multinational firms both demand the globalization of IFRS.

International Accounting Standards and their Impact on the Banking Sector Performance

The performance of the banking industry in the Kurdistan area of Iraq is the focus of this study, which explores the influence that International Accounting Standards (IAS) have had on the situation. The purpose of this study is to determine the degree to which IAS has been implemented in the banking industry, the factors that have an influence on the implementation of IAS, and the effect that IAS implementation has had on the financial performance of banks in the region. Data was collected from a sample of 142 banking professionals located throughout the region using a quantitative research technique. According to the findings of the study, the percentage of financial institutions that have adopted International Accounting Standards (IAS) is rather low, and the majority of financial institutions continue to rely on their own national accounting standards. It was discovered that the implementation of IAS has a large and beneficial effect on the performance of banks, with fully adopting banks demonstrating improved levels of profitability, liquidity, and asset quality. Education and training were shown to be the most important predictor variables in the banking sector in the region when attempting to explain the adoption of International Accounting Standards (IAS). The lack of resources and technical knowledge in the region was cited as the reason for the sluggish adoption of IAS in the region. According to the findings of the study, there is a need to improve education and training, raise awareness of international accounting standards (IAS), encourage regulatory support, provide technical assistance, and promote international collaboration in order to increase the likelihood that IAS will be adopted in the banking sector in the Kurdistan region of Iraq.

Understandability of Financial Reporting Requires Comprehensive Explanations and Not Mere References to Accounting Standards or Reports Attached to Financial Reporting

The understandability of Financial reporting requires that the profit and loss, the balance sheet, the notes, the cash flow statement and all the reports that, although not part of the Financial Reporting, constitute the company's communication to the outside world be intelligible and understandable by anyone reading a portion or all of the Financial reporting. And it should be noted that the person who has to understand everything set out in the financial reporting must, necessarily, have an even minimal basis of the concepts set out in the Financial reporting because it is impossible to draft a Financial report without using accounting terms or techniques that may be clear to a person who does not have the even minimal basis in accounting and financial reporting itself point. Understandability is achieved by applying national or international accounting standards, depending on the type of company in question, as well as civil law for companies obliged to do so, and by implementing the advice that the board of statutory auditors or auditors highlight in their documents and reports that they draw up during the audits that are periodically carried out in the company and that are drafted especially during the period of preparation of financial reporting. However, this article points out that merely referring to an accounting standard or a report by the board of auditors in which findings are highlighted and the consequent assertion that the accounting standard has been duly applied and all conclusions made by the auditors have been slavishly observed does not ensure the understandability of financial reporting. A particular analytical method must specify the accounting standard used and its involvement in financial reporting. In the presence of auditors' reports with findings, the findings made by the board of auditors must be explicit. It must be explained unambiguously in what manner and according to what accounting method the recommendations in the report in which the findings are highlighted in the accounting and corporate field were implemented.

What Factors Drive Faithful Financial Reporting by Subnational Governments? Insights from Switzerland

Using the context of the 26 Swiss subnational governments, this paper aims to empirically identify factors driving—or not—the use of accounting and reporting standards aimed to increase financial faithfulness. Because the 26 entities had a certain autonomy, as they jointly implemented two major successive accounting reforms over the past forty years, policy outcomes were heterogeneous. Findings suggest that both citizen demand and government supply-side factors contribute to explaining the extent to which each entity’s policy led to a faithful reporting. This paper thus highlights some of the challenges in implementing supranational (e.g., IPSAS, EPSAS) or national accounting standards at lower tiers, when governments have some leeway over the process, while yet facing strong democratic scrutiny.