- 15 Marks
CR – Nov 2016 – L3 – SC – Q7 – Regulatory Environment for Corporate Reporting
Discuss the merits and challenges of adopting IFRS in Nigeria and identify local standards still applicable post-IFRS adoption.
Question
a. ABC Plc, in accordance with the regulations of the Nigerian Stock Exchange on transition to IFRS, prepared its first IFRS Financial Statement in 2012. The Financial Statement was contained in a voluminous document of 155 pages. Some of the stakeholders found it difficult to understand the essence of the voluminous document.
You are required to prepare a brief report, highlighting the essence and merits of the adoption of IFRS by Nigerian Companies and state some of the challenges that could be encountered. (10 Marks)
b. Statements of Accounting Standards (SAS) in Nigeria have been replaced by International Financial Reporting Standards (IFRS); however, some of these local standards relating to industry-specific rules which are not found in IFRS are expected to be applied by companies in the industries as far as they do not conflict with IFRS.
You are required to examine the above statement and identify those statements of Accounting Standards that are still applicable after the adoption of IFRS. (5 Marks)
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- Tags: Challenges of IFRS, Financial Reporting, IFRS, SAS, Transition
- Level: Level 3
- Topic: Regulatory Environment for Corporate Reporting
- Series: NOV 2016
CR – Nov 2014 – L3 – SC – Q5 – Introduction to Corporate Reporting
Evaluate IFRS management commentary requirements and their relevance in financial reporting.
Critics of traditional corporate financial reporting under Generally Acceptable Accounting Practice (GAAP) argue that financial statements alone are not considered sufficient without a narrative that provides a context within which to interpret the financial position, financial performance, and cash flows of an entity.
A financial expert within the board of Abcon Kombe Plc, aware of the above criticism, has proposed that Abcon Kombe Plc should include in its financial statements, management commentary to satisfy the numerous analysts that use its annual reports.
Required:
(a) Advise the Board on FIVE elements of information which IFRS Practice Statement expects to be included in management commentaries to meet its objectives. (5 Marks)
(b) Relate the FIVE elements of information above to the needs of the various primary users. (7 Marks)
(c) Justify why management commentaries should be made compulsory in Nigeria’s financial reporting environment. (3 Marks)
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