The preparation of financial statements in accordance with AASB standards is one of the most important government regulations imposed on many companies in Australia. According to Australian Securities and Investment Commission (ASIC) report published in 2016 more than 28000 Australian companies are required to prepare financial reports. However, Leo et al, (2018) report that all companies are not required to prepare financial statements that comply with accounting standards. Furthermore, there has been concern for a number of years that the increasing complexity of accounting standards, in particular the level of disclosure quality required, may not be appropriate for all companies.

Conceptual Framework for Financial Reporting (2019 revision) states that all reporting entities are required to prepare general purpose financial statements in accordance with AASB standards.

In particular, empirical research argues that there is no level playing field when it comes to financial reporting and that significant judgement is involved when entities self-assess whether they are required to prepare general purpose financial statements (GPFS) or may instead prepare special purpose financial statements (SPFS) (AASB 2018).

Required:

You are required to identify major changes to financial reporting practice and financial reporting regulation that resulted following the adoption of International Reporting Standards and Accounting Conceptual Framework.

In your report:

1. Explain the key sources of regulation for financial reporting in Australia.
2. Critically examine some possible arguments for and against disclosure regulation.
3. Describe how the IASB influence financial reporting in Australia.
4. Discuss the nature of reporting entity, and to which entities do accounting standards apply?
5. Explain the objectives of general purpose financial reporting according to conceptual framework.
6. Describe the purpose of conceptual framework for financial reporting.

Briefly explain major changes to financial reporting practice and regulation that resulted following the adoption of International Reporting Standards and Accounting Conceptual Framework.