Financial Statement Presentation - Essay Example

It is concluded that the IAS 1 has evolved over time in keeping the increasing sophistication, complexity and geographical spread of transactions. It broadly fulfills its objective as defined in the standard itself and the framework of IASB. Financial Statements is a set of summary of accounts of an enterprise, running a business, a commercial activity or other formal entity. In common parlance as understood in day to day communication financial statements are records of accounts (financial transactions).

Each country has evolved its own conventions, rules and laws for preparation of financial statements. Over the years these have developed as a general set of standards and methods through which preparation of auditing financial statements takes place. These common set of standards have come to be known as GAAPs - Generally Accepted Accounting Principles. Thus in USA, US GAAP are used similarly in European / Asian / African countries their own GAAPs evolved and are used According to the prevalent law of each country.

It is presumed that the accountants governed by any GAAP would give true and accurate and fair state of financial health of the enterprise under the circumstances, though considerable leeway exists for them to manipulate and present the accounts to suit their own good. Legal Aspects of ReportingUSA the world's largest economy has an apex body US Securities and Exchange Commission (SEC) that publishes their motto in the form of mission, "To save investors, maintain precise and correct, well-defined, and fast markets to provide capital formation".

This also states that there should be liquidity and transparency in any kind of US investment where investors should have the right to information in compliance with rules and regulations defined by the government. SEC puts set of information necessary for making right decision about purchase, sale or keeping the security from the results published by the company. Every year SEC prosecutes several companies for infractions of violations of laws of SEC most common of which are frauds related to accounting or misleading information about the securities or firms that releases them.

SEC has a separate wing known as TheDivision of Corporation Finance. This division helps the SEC in discharging its role to keep an eye on mandatory disclosures of important significant information to the public / institutional investors. Enterprises are mandated to comply abide by set of laws (regulations) regarding disclosure that must be created at the time of initial offering and thereafter on a regular and periodic intervals.According to SEC, the Division works in tandem with the Chief Accountant, and it supervises the operations of accounting professions primarily the Financial Accounting Standards Board