Comparative International Reporting (Accounting) Essay

Comparative International Reporting (Accounting) - Essay Example Financial reports should be understandable, relevant, comparable and reliable (New Zealand International Financial Reporting Standards.2008). Financial reporting as said earlier is mandatory in all countries irrespective of laws prevailing. Accounting reports are prepared according to laws or standards framed for this purpose. In New Zealand the Financial reporting standards board or the FRSB is responsible for developing, implementing and ensuring accounting standards in the country (New Zealand Equivalents to International Financial Reporting Standards. 2011). The FRSB forwards new accounting standards to the Accounting Standards Review board or the ASRB for approval. It also works along with the International accounting standards board. In New Zealand issuers of securities and large profit making reporting entities are required to fully comply with the international financial reporting standards. According to the financial reporting act of 1993, reporting entities includes busines s which issues securities under the securities act and companies and other entities whose legislation requires them to comply with the act of 1993. The financial reporting act of 1993, places obligations to all such organizations to prepare financial statements in compliance with the generally accepted accounting practice within five months of their financial year. Smaller companies except issuers of securities and overseas companies can comply with less stringent requirements up to the limit of justification on their costs. It is also mandatory for companies to audit their financial statements and to file them with the registrar of companies in the public register. Meanwhile small overseas companies are exempted from this condition. The 1993 act has established the ASRB with the prime purpose to approve financial reporting standards. The Institute of chartered accountants of New Zealand, a professional body is responsible for developing and submitting financial reporting standards to the board (Financial reporting law. 2010). Since the introduction of New Zealand eqvallent to the IFRS, all the entities have to work through ever changing and more complex requirements of reporting. These challenges have reached the point of height when the entities are required to prepare and submit their annual report to share holders and other stake holders. With regard to presentation of the income statement, the companies have two options. The financial statements are approved for the purpose of issue within a period for 65 days average for listed entities and 100 days for non listed entities. Financial statements make up nearly 60% of the annual report. According to NZ IAS 1 , a minimum and separate disclosure on the face of the income statement of revenue, finance costs, profit and loss share of associates and joint ventures accounted for using equity method, profit or loss and tax expenses. Even though there is no specific requirement to show operating expense on the sta tements, the NZ IAS1 gives a choice for companies to select presentation of services by function or by nature. The NZ IAS1 also requires inclusion of primary statements that show changes in equity. This can be due to changes arising other than from transactions with equity shareholders acting in their capacity and all changes in equity or SOCIE. With regard