Financial Reporting case study Coursework Example | Topics and Well Written Essays - 1500 words

Financial Reporting case study - Coursework Example accounting practices in different countries, the International Finance and Reporting Standards has established guiding principles to facilitate the convergence of the international accounting practices and to improve the quality of the information presented to different users. In the attempt to achieve the convergence in accounting practices, the IFRS has established the following principles: information relevance, information reliability (faithful presentation, neutrality, complete and free from material error and prudence), comparability (consistency and disclosure of accounting policies), understandability and materiality. In addition, the IFRS has also provided a standard definition and guides in recognition of various elements of the financial statements such as revenue recognition, definition of different assets and liabilities (ZüLch & Hendler 2011, pp. 12-18). In response to the needs and requirements of various bodies such as the FASB and the IFRS, and different stakeholders in the government and their agencies, customers, the investors, the employees, lenders, suppliers and other trade creditors and the public, it is necessary to create financial statements. The needs of the mentioned stakeholders are as follows: the investors, who provide capital to a company are concerned about the levels of risk and return on their investments. They need financial information to help them decide whether they should buy or sell shares of a particular company. They also need the information that enables them to assess the ability of the business to pay the cash dividend. The second category of people is employees. Employees need to know whether their employer is financially stable. They use this data to evaluate the employer’s ability to implement a fair remuneration package, provide retirement benefits and be able to offer employment chances (S audagaran, 2009, pp. 150-155). Lenders use financial information to access the ability of a company promptly to pay both