STATEMENT ANALYSIS

Statement Analysis - Investors And Other Stakeholders Are Looking For Transparency Beyond The Basic Financial Statements To Better Understand How Businesses Operate And Perform



Table of Content

Introduction3

Findings4

Importance Of Integrity In Financial Reports4

Importance Of Transparency In Financial Reports4

Challenging factors caused by the financial crisis to the financial reporting standards6

Uncovered Flaws In Accounting Standards7

Accounting Standards Reforms8

Conclusive Recommendations13

Statement Analysis - Investors And Other Stakeholders Are Looking For Transparency Beyond The Basic Financial Statements To Better Understand How Businesses Operate And Perform

Introduction

The current global financial crisis has become a significant change occurs by the various spheres of life and on a global level unrivalled, best represents this fact, the statement edifice French researcher in the financial times magazine when he described the crisis as "summarizes what the crisis is the domino effect, how can that be? Imagine that there were two rows of dominoes and put them next to each other, and there is another row of dominoes has been put behind them: both front rows are located, and in response to sequential fall more" (Financial Times, 2010).

Recently, it has been accused of accounting standards on fair value as one of the main reasons for the emergence of this global crisis, as stated vindicated many of the actors and especially the number of U.S. senators, and a lot heads of Council departments banks and giant companies have called for an end to the application of all Accounting Standards for at fair value and began councils accounting standards to stand side by side to defend the standards of fair value and resisted calls to stop, and the best evidence of the spectrum the combined efforts of both the International Accounting Standards Board (IASB) and Financial Accounting Standards Board of America (FASB) to defend the standards of fair value and justify the validity and direct the establishment of committees entrusted with the tasks of analysis of the crisis and the statement of the fair value of patent standards (Kolk, 2008, 3).

Findings

Importance Of Integrity In Financial Reports

Integrity is important not only in its own right but also because it, helps establish trust, underpins high quality information that people can rely on and it enables markets to develop and allocate resources more efficiently.

It also delivers value to individuals, organizations and nations by supporting the achievement of desired outcomes, and

inspires public policy responses when there is a loss of confidence in markets.

Importance Of Transparency In Financial Reports

For making big decision regarding investing a transparent and unbiased report is must. Each and every investor seeks for complete transparent financial reports, in fact, it is the quality of report, which helps investors in making certain investment decision. On the other hand, investing on the basis of fake financial reports increases the risk of losing credibility.

Importance of Transparency and Integrity in Financial Reporting in Global World

Effective financial reporting depends on high-quality accounting standards, as well as the consistent and faithful application and rigorous independent audit and enforcement of those standards. Financial reporting is of great importance to investors and other financial ...