The paper "Need for International Reporting in Inconsistencies " is a perfect example of finance and accounting coursework. The major aim of this article is to articulate the concept of Australian and international accounting conceptual framework. It analyses and identifies confusion in the breezing of the conceptual framework. Also, it reflects the manipulation of the accounting data by the company management and extends to which the manipulated data mislead the users of accounting records. Manipulation is being reflected by the inconsistencies of accounting data, the variation of accounting data reveal the unreliability of records of the organization The theme of inconsistency that comes as a results manipulation of entries shows the initiative reflection of bankruptcy, insolvency and the element of fraudulent theme in the organization.
The falsified accounting records can be the act of management to hide the company stakeholders the crooked transactions they are engaged in and secondly the fallacious data can be done by the board of directors to protect the reputation, goodwill and to maintain their major customers from the essence of insolvency and bankruptcy that data may reveal about the entity. By the act of the company being incapable of meeting or honoring its obligation the resultant battle is to alter the accounting data thus this brings inconsistencies in the accounting data.
According to the international accounting standard board (IASB) framework, there should be a defined tradition of accounting financial reporting structure. U.S accounting standards provide a framework that hunts for consistency, transparency, relevancy and reliability of accounting information. Foundation strengths of accounting standards should have comprehensive sets of rules and principles governing the representation of accounting information that requires the consistency, comparability, reliability and relevancy of accounting information. The Financial Accounting Standards Board (FASB) envies a conceptual accounting framework as a consistent system of unified aims and basics that leads to reliable accounting standards that stipulates the purpose, nature, and limits of financial statements and financial accounting.
For the setter’ s Australian standard, their prime reason for the conceptual framework (CF) was act as the ‘ guide’ in rising and reviewing accounting standards. The International Accounting Standards Committee (IASC) moderates the role of a conceptual framework furthermore acknowledging that some of the accounting standards are inconsistent to the rules and procedures stipulated by the framework.
Although the Australian Accounting Standards Board (AASB) purportedly follows the policies of harmonizing conceptual frameworks and accounting standards, inconsistencies in the conceptual frameworks of the IASC are still acknowledged. International accounting framework personifies difference in accounting records as fictitious alteration of accounting statements to suit the need of the management and the stakeholders of the company. The act manipulation of accounting records is illegal to accounting standards, the management manipulates their records to evade tax payment or reduce the tax liability, to defend their incapacitation in meeting their obligation liability and the liquidation of the company.
Manipulative disclosure on the income statements is categorized earning management – this refers to the manipulation of the accounting results to suit the business impression and abusive earning organization which involves distorting of companies’ financial performance to attain the desired results. Management can also alter the accounting records to window kit their stakeholders i. e to gather for an instant drop of companies retain earnings the management can decide to sale their assets to gather for the change in the graph of earnings.
Manipulation of accounting information is can be attained through accounting operation decisions and operations and fraudulent financial reporting that mislead the facts about the firm. Auditors have a multitude of the task to eradicate the fraudulent misrepresentation of accounting information.
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