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Explanatory Process for Adoption
of IFRS in Indian Banks
--G Santosh Reddy and Ruchir Desai
In the present times International Financial Reporting Standards (IFRS) has gained momentum due to globalization and liberalization. Multinational companies are setting up businesses in emerging markets and entities in emerging economies are accessing global financial markets to fund their expansions and acquisitions internationally. The firsttime adoption of IFRS impacts the financial statements of entities due to differences between local Generally Accepted Accounting Principles (GAAP) and IFRS. The impact of IFRS is perceived to be high for banks due to complexities in IAS 39: Recognition and Measurement of Financial Instruments and Hedge Accounting. This paper discusses the conceptual IFRS adoption process for Indian banks for effective implementation of IFRS.
© 2015 IUP. All Rights Reserved.
Assessing the Risk of Fraud in Published IFRS
and Nigerian GAAP Financial Reports:
A Comparative Application of the Beneish Models
--Nwoye Ugochukwu J, Obiorah Justina N and Ekesiobi Chukwunonso
With the adoption of IFRS on January 1, 2012, the publicly listed companies in Nigeria had their existing financial reporting frameworks that were based on Nigerian GAAP (SASs) alternated with the IASB’s new accounting standards. Although the manufacturing sectors of the Nigerian economy had, prior to the adoption, shared in the after-effect of the global economic distress that was chiefly engineered by a series of corporate failures and financial scandals, the advent of the new principle-based international accounting guidelines appears to have successfully re-engaged the interest and confidence of users of financial statements in the stewardship of listed companies in Nigeria. Thus, comparatively deploying and applying the Beneish 8-factored and 5-factored variables within relevant items of the financial reports of 11 selected manufacturing companies in Nigeria for the period 2008-2013, was considered adequate to ascertain the financial reporting quality of the post IFRS published financial statements in comparison with those of the Nigerian GAAP within the weightings of ‘material misstatement’. Although the study found that the 5-factored variables (Beneish 1997 model version) appear to be more effective in predicting genuine existing risks of material misstatement and provide promises for the effective avoidance of the Type II error among users of the two models, the 8-factored variables seem to have revealed more incidence of possible risk of material misstatement among the companies studied.
© 2015 IUP. All Rights Reserved.
Environmental Accounting and Firm Profitability in Nigeria:
Do Firm-Specific Effects Matter?
--Ayoib CHE-AHMAD, Nosakhare Peter OSAZUWA
and Chijoke Oscar MGBAME
The study aims to investigate the effect of environmental accounting on the financial performance of firms in Nigeria. It utilizes a cross-sectional research design and content analysis to obtain environmental disclosure information from the audited annual reports. Regression analysis, adopting the ordinary least square method, is used and the results reveal that there exists a significant relationship between environmental accounting disclosure and firm’s financial performance when environmental accounting is moderated by firm-specific variables such as firm size, industry type and auditor firm type. The primary contribution of the paper is a more realistic appraisal of the relation between environmental disclosure and firm’s financial performance by specifying models that account for both individual effects of environmental disclosure and the effect of interactions between environmental disclosure and firm-specific variables on firm’s financial performance.
© 2015 IUP. All Rights Reserved.
Research Note:
Inventory Management Accounting
for Obsolete Inventory
--Meenu Verma
Running a successful business is all about spending your cash wisely. Generally companies invest and block a large amount of their working capital in inventory that may comprise of either raw materials, Work-in-Progress (WIP) or finished goods. When there is a large quantity of finished goods left in the warehouse for a long period which cannot be sold, that must be written off as an expense in the books as obsolete inventory. Inventory Management Accounting is an internal business process that serves the purpose and facilitates better control on inventory by the companies. Reconciliation of inventory accounts entails an important part of the accountant’s work under which they have to review the stored information with the actual inventory status in the warehouse. Once such dead stock is identified, it has to be disposed of at the earliest. The current paper discusses the reasons for inventory obsolescence and also the accounting approach for its write-off in the books.
© 2015 IUP. All Rights Reserved.
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