As Chartered Accountants it is vital that we keep up to date with current issues and how they impact on financial reporting requirements and the related audit or corporate governance demands. Now more than ever confidence in Financial Reporting is critically important to global financial stability and sound economic growth.
Chartered Accountants are at the coal face dealing with new challenges that have arisen as a result of the economic crisis. Most recently, the Financial Crisis Advisory Group (the "FCAG") published a report with recommendations which aim to ensure that confidence in the transparency and integrity of financial reporting is maintained.
It has never been more important that the impact of these decisions upon the Financial Statements be more carefully considered, given that they are intended to provide the users with a clear view of the status of the entity at a particular moment in time. The Financial Reporting process is under the spotlight of investors, credit institutions, business partners and regulators.
There is a plethora of Companies legislation to comply with including Companies Acts 1963 - 2009 (ROI), Companies Acts 1986 - 2008 (UK and NI) as well as many other specific legislation such as the Charities Acts, Friendly Societies Acts, EU regulations, Anti-money laundering and fraud legislation, Criminal Justice Acts, etc.
Our role as accountants is to use the best means possible within the regulations to ensure that the true and fair view of a situation is presented. We have encountered many scenarios in relation to obtaining valuations of investment properties for example. Trying to determine the open market value of an investment property is like trying to measure the length of an elastic band. Use of an expert is essential in getting it right.
Insolvency, liquidations, administration and examinership are fast becoming common buzz words. The Going Concern basis of any business is subject to increased scrutiny. Chartered Accountants need to give due consideration to the ability of the business to stay afloat. Tough economic conditions and increased pressures to achieve results are all factors that contribute to an increased risk of fraud. Providing for provisions on onerous contracts, accounting for bad debts, accounting for poor pension performance, recognising WIP in the financial statements and considering post balance sheet events are some of the many issues that need to be even more carefully studied during the Financial Reporting Process.
Chartered Accountants Ireland has responded by developing a practical course for members entitled 'Current Issues in Accounting - Applying Irish GAAP in Challenging Economic Conditions'.
Niall Fitzgerald
Practice Consulting
Chartered Accountants Ireland
For more information on this course please visit www.charteredaccountants.ie/cpd