Directors urged to dedicate more time to year-end reporting
With the end of financial year fast approaching, the Institute of Chartered Accountants Australia is urging directors and preparers of financial reports to understand their responsibilities – particularly around their disclosure obligations – as several new accounting standards become mandatory for June year ends.
Speaking about the role of high quality financial reporting in the business sector, Institute Head of Leadership and Advocacy Rob Ward said: “The quality of the financial report is key to ensuring confident and informed markets and users.”
“Heightened regulator focus on the application of the standards should be expected. It can be a challenging exercise to achieve financial reporting quality at a time when several new accounting standards take effect for June year ends,” Mr Ward said.
“Applying these standards can involve significant judgements which are accompanied by significant disclosures. These are key areas that directors and preparers need to focus on as early as possible in the financial reporting process, to ensure the information required can be readily obtained,” he said.
While the specific impact of the new standards will depend on the structure and operations of the organisation, which industry it operates in and any contractual agreements in place, assessing the impact of the new accounting standards should be a key priority for all organisations.
There are few organisations that will escape these requirements. This is because most entities will have at least one of the following: investments in other entities, employee provisions, fair value measurement or impairment testing requirements.
In light of the changes the Institute has released its latest guidance for end of year financial reports, Essential Guidance for the June 2014 reporting season
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Article last Updated 6 June 2014