International Financial Reporting Essay Example | Topics and Well Written Essays - 3000 words

International Financial Reporting - Essay Example Instead of doing investment, the concept of disinvestment was directly or indirectly supported and applied by many companies. The last quarter of 2008, the entire year of 2009; and to some extent the year of 2010 was only filled with the reports of shaken investor confidence, layoffs and financial defaults and so on. The world economy suffered the burns of financial crisis of the year of 2008. Basically, the centre of this problem was the United States of America where the problem of sub-prime loan was not handled properly; rather, it was mishandled by the related and relevant authorities. Some financial gurus and critics are of the view that the inception of financial crises emerged in the year of 2000-2001 with the sudden and huge debacle of energy giant Enron; subsequent to that, the investigative team brought the huge financial findings in the report of Sarbanes-Oxley, which heavily and greatly emphasised on the further stringent financial measures. Even the findings of the Sarba nes-Oxley were not successful in realising the dangerous financial nightmares are yet to unleash! Had more focus and attention were given to the findings of the Sarbanes-Oxley, we would have not seen the brutal and inhumane face of the financial crisis of the year of 2008. Undoubtedly, a significant and considerable role of creative accounting and window dressing was there in the presentation of financial statements; the shareholders, institutional and small investors were given and shown such financial statements which were not totally representing a ‘true and fair view’; the financial statements either to a minimum extent or to a considerable extent were filled with the help of window dressing and creative accounting. Unfortunately, the role of International Financial Reporting Standards, also known as International Accounting Standards Board, did not come for any help to rescue the international world economy from the threat and force of the 2008 financial crisis. Th e main reason for that, the standards and regulations of this international accounting body are voluntary in nature not compulsory or binding on any small or large financial entity. Now, in order to serve the objectives of this paper, it is vitally important to revisit the basic conceptual framework of the international financial reporting standards; what are its basic components that are highly essential for representing the financial information in a standard format and standard presentation? How this international accounting body serves the interests and objectives of small, medium and large shareholders, investors, and other people who have direct or indirect financial interest in the presentation of the financial statements? History of frameworks for IASB The decade of 1960’s observed many widespread outcry over the absence of uniformed financial standards. Due to this fact, many cases emerged that highly and greatly required a desperate need and requirement of single bu t unified accounting standards. They should be there to provide guidance and provide a framework that guide an entire process of accounting standards and accounting practices. In response to this accounting problem, many accounting bodies gathered and