International corporate reporting issues Essay Example | Topics and Well Written Essays - 3000 words

International corporate reporting issues - Essay Example Literally, the differences in the financial reporting system in varying countries have acted as an obstacle in the integration of national economy with global economy (Verschoor, 2011; Alexander, Britton & Jorissen, 2007). Thus, in order to deal with these challenges, IASB and FASB together have been duly engaged in promoting harmonization of financial reporting systems (Whittington, 2008; Mogul, 2003). Emphasising on these aspects of the international accounting standards, this paper intends to identify and explain the six major qualitative characteristics of accounting information. Furthermore, this paper aims to evaluate the application of these qualitative characteristics by Diageo plc focusing on three particular areas. ... The institutions in the accounting standards namely International Accounting Standard Board (IASB) and Financial Accounting Standard Board (FASB) have been involved in developing conceptual framework for enhancing the financial reporting system. The primary objective of this conceptual framework has been related with identifying the major purpose of financial reporting in business in accordance with the prevailing economic circumstances (Obaidat, 2007). In other words, the conceptual framework developed in accumulation of the principles specified by IASB and FASB deals with establishing objectives and guidelines which are expected to serve as the basis for the preparation of financial accounting and reporting standards. It is worth mentioning that conceptual framework mainly consists of four major items which includes: Objectives related with financial reporting Elements concerning with financial statements Recognition and measurement concepts Qualitative characteristics of accountin g information Additionally qualitative characteristics are considered to be one of the vital components of the conceptual framework that supports decision-usefulness and stewardship. Moreover, there are six primary qualitative characteristics that are considered to be vital for economic as well as business decision making according to the specified guidelines in the international standard (Obaidat, 2007). These six elements of qualitative characteristics have been further explained below in relation to their usefulness in terms of decision making and stewardship. Relevance In order to ensure the obtained accounting information to be relevant to creditors, investors and other interested parties, it has been argued that such accounting information