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Reporting Standards

Essay by   •  April 20, 2016  •  Essay  •  587 Words (3 Pages)  •  1,154 Views

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‘Worldwide, there are no identical accounting practices in different countries. However, there are countries that have in common the same influences (MĂCIUCĂ , SOCOLIUC 2013).

In the United States (US) the reporting standards are set by Financial Standards Board (FASB), these standards are enforced by the Security Exchange Commission (SEC).

The FASB is responsible for setting accounting standards in the USA, while the SEC is responsible for the publication of the financial statements for the shareholders. This is done by monitoring the financial reporting filed and publishing any pertinent information via their website.

The Sarbance-Oexley Act (SOX) was implemented after the ENRON fiasco to reduce the risk of fraud with respect to financial reporting; the act states that compliance is mandatory. Non-compliance can lead to a fine or more that 20 years in jail or both.

US GAAP is mainly used even though some steps have been made to sync the US GAAP to IFRS for comparability; nonetheless there are still some apprehensions with respect to IFRS international reporting and its consistency.

We note based on the foregoing US is heavily regulated and compliance is mandatory. US and Barbados have some similarities with respect to the statutory framework, however we note that compliance implementation is not as strict as the US.

Barbados’ reporting standards are set by the Institute of Chartered Accountants of Barbados (ICAB) who are the regulators and the standard setters. ICAB adopts the International Standards issued by the IAASB as national standards and accounts are prepared according with the IFRS (ICAB).

The Securities Commission is responsible for the monitoring and enforcement of Financial Reporting, accounting and auditing. Non-compliance is not heavily penalized according to the Companies Act of Barbados CAP 308 “A person who makes or assists in making a report, return, notice or other document (a) that is required by this Act or the regulations to be sent to the Registrar or to any other person, and (b) that (i) contains an untrue statement of a material fact, or (ii) omits to state a material fact required in the report, return, notice or other document, or necessary to make a statement contained therein not misleading in the light of the circumstances in which it was made, is guilty of an offence and liable on summary conviction to a fine of $5 000 or to imprisonment for a term of 6 months, or to both.”

Accounting classification forms groups of countries based on the following criteria as outlined by (Elliott, Elliott 2013). 1. The classification of the legal system, 2. The way in which the industry is financed 3. The influence and status on the accounting profession, 4. Accidents of History and 5. Language.

Notwithstanding the importance of accounting classification some

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