Accounting and auditing standards relay the myriad responsibilities that every professional auditor must comply with. Standards set forth the overall objectives of an auditing operation and define the nature & scope that enable any independent auditor to attain those objectives. Generally accepted accounting standards across different countries also define the scope, authority, and structure of the governing body and establish the general responsibilities of the auditor.
If you aspire to become a certified public accountant, then you need a thorough grasp of the generally accepted accounting & auditing standards. They are fundamental to every task and assignment you will encounter & poor ideas may very well compel you to seek professional accounting assignment help. Brush up on your GAAS concepts with this little article that focuses particularly on
Let’s dive in.
A Look at the Core Tenets
The International Financial Reporting Standards (IFRS) were developed and supervised by the International Accounting Standards Board, an international committee, with the purpose of setting a globally consistent basis for financial reporting and auditing.
Like GAAP/Ss across different nations, the IFRS builds upon accepted accounting standards & practices and provides investors, auditors, & other users across the world with a standardised framework. More than 100 countries across the European Union, America, and Asia have adopted the IFRS.
The core aspects/tenets of the standards lay down the methodology of financial analysis for auditors and analysis. Below is a list of the core chapters/elements of the IFRS →
- Initial Adoption of International Financial Reporting Standards
- Share-based Payments
- Business Combinations
- Insurance Contracts
- Non-Current Assets for Sale/Discontinued Operations
- Evaluation of Mineral Resources
- Financial Instruments: Disclosures
- Operating Segments
- Consolidate Financial Statements
- Joint Arrangements
- Interest Disclosure of Other Entities
- Fair Value Measurement
- Regulatory Deferral Accounts
- Contracts with Customers
- Leases
- Insurance Contracts
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The Standard Rules for IFRS Implementation
- Statements of Financial Position: As per IFRS terminology, this is the company balance sheet. The standards impact the way company financial information is reported on the balance sheet.
- Statement of the Comprehensive Income: This is the profit and loss statement AND the statement of other income (assets, equipment, etc.), drafted separately or as a whole.
- Statement of Changes in Equity: Also referred to as the statement of retained earnings, this document reflects any changes in the profit or earnings of a company during a specific financial period.
- Statement of Cash Flows: This particular financial statement coalesces all information about a company’s financial transactions within a given period and categorises them accordingly.
Additionally, the IFRS auditing procedures also require company summaries of resident accounting policies and rules. All financial reports are scrutinised in comparison with previous reports to uncover and extract the most relevant information.
As we wrap things up, we take an exhaustive look at some of the most prominent differences between the International Financial Reporting Standards (IFRS) and the Australian Accounting Standards Board (AASB).
A Comparative Table for IFRS vs AASB
| Feature | IFRS | AASB |
| Rules vs. Principles | IFRS is much more principle-based than. | Similar to the US GAAP, the AASB is perceived to be much more rules-based than the IFRS. |
| Inventory Evaluation | Both the GAAP and the IFRS allow the FIFO, weighted average, and specific identification methods for inventory valuation. However, IFRS does not allow the LIFO method. | The AASB allows all methods of inventory evaluation. |
| Revenue Recognition | The IFRS and AASB converge on the revenue recognition standards as they both share a common principles-based approach. | As mentioned, AASB and IFRS follow similar revenue recognition standards. |
| Financial Statements | Balance Sheet, Income Statement, Statement of changes in equity, cash flow statement | Similar statements are required, except that changes in equity are recorded in the income statement |
| Errors | Any fundamental error of significance receives the benchmark treatment and, as necessary, alternative corrective treatment. | All errors need to be corrected within the reporting period within which they are discovered. Detailed disclosures of errors are to be made in the notes of the financial statement of impact. |
Well, that’s all the space we have in this article. Hope this was an interesting and informative read for everyone.
Accounting and auditing are vast domains so you need to put in some serious effort if you wish to shine. Study diligently if you are aspiring to be a CPA, and in case you need some urgent assignment help in Melbourne (or anywhere else in Australia), always connect with a reliable service.
