Assessment of recent developments in financial reporting Essay

Assessment of recent developments in financial reporting - Essay Example This study will understand whether legal enactments and obligations are sufficient to perform financial activities in an ethical and logical manner. Drafting the financial reporting takes a lot of accounting knows how and also the thorough knowledge of legal obligations. The author of the study would lay emphasis on the accurate conduct of financial activities with guidance from the standards laid down by the accounting standards and the legal requirements. The need of these accurate financial reporting and also the critical evaluation of the effectiveness of the legal requirements in the preparation of the financial statements would be covered in the study. Finally, the study will conclude whether the legal requirements of the particular country are sufficient for the companies to perform the accounting and financial activities. International Accounting Standards Board &Financial Accounting Standards Board The establishment of International Accounting Standards Board, Financial Acco unting Standards Board boards was in the year 1973 and was set for the primary purpose of formulation of regulations which would also help in the education of the users, stakeholders and management. Along with international convergence the company the board also focuses on the quality of financial reporting (Liu, 2011). International Financial Reporting Standard IFRS on the other hand will focus on the development of the accounting framework, which will help in the betterment of the company. IFRS is one of the major accounting standards board, which are responsible for checking whether the accounting standards developed by them are effectively executed and implemented within the system for the betterment of the organization or not (Allen, McAndrews and Strahan, 2001). The UK Company Act The UK company act is formed under the Companies Act 2006 and governed by Insolvency Act 1986. help in the development of high quality accounting standards, which are highly compatible with the busin ess environment that can be used for the regional and cross border investments (Allen, McAndrews and Strahan, 2001).It is also responsible for the development of accounting framework, which is accountable for the construction of the organizational structure and also preparation of consolidated financial statements for the benefit of cross listed companies (Liu, 2011). Generally Accepted Accounting Principles Generally Accepted Accounting Principles (GAAP) is one of the standard frameworks which serve as guidelines for performing financial accounting activity (Liu, 2011). These include conventions, standards, rules and regulations which are known as general accounting standard. Financial & Legal Requirements in Stock Exchange There are several legal and financial regulations and requirements which are applicable for the stock exchanges of different countries. The stock market is regulated by several disclosure standards which help in transparent business operations and also encourage s shareholders in smooth investing activities. For example the London Stock Exchange has several listing rules and regulations which assesses the shareholder’s issuer eligibility and also ensures that these regulations are made. There has been major fluctuation in the stock market movement in the past six months because the overall market has been extremely sensitive vulnerable to the sensitive