Slide AKT 405 Teori Akuntansi 14 Godfrey

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GODFREY HODGSON HOLMES TARCA

CHAPTER 14

EMERGING ISSUES IN ACCOUNTING AND

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XBRL

• _{XBRL = Extensible business reporting}

language

• _{Allows financial information to be}

presented in an interactive way that in turn allows individual items of data to be extracted by software to produce reports custom designed by individual users

– _{SEC (2008)}

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XBRL

• _{XBRL will loosen the control}

managers currently have on data

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The effects of corporate

collapses and Sarbanes-Oxley

Act (2002)

• _{High profile collapses in early 2000s}

changed the image of accounting and auditing and its regulatory environment

• _{Criticism of auditor independence and}

corporate governance

• _SOX

– peer reviews replaced by PCAOB inspections

– restrictions on provision of non-audit

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Issues surrounding the application

of fair value accounting during the

global financial crisis

• _{Some believe the practice of fair}

valuing assets was contributing factor

– _{it requires the write-down in the value of}

some assets when markets are turbulent

• _{marking financial assets to market}

• _{Considerable dispute about this} – _{SEC investigation (2008)}

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Is the criticism leveled at

‘fair value measurement’

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Reactions by standard

setters

• _{IASB (October, 2008) changed rules so that}

losses from changes in market values of

financial assets could be reclassified under certain circumstances avoiding charging

mark-to-market losses to the income statement

• _{FASB (2009) introduced a ruling to allow}

banks to use their own judgement in

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Auditors and the global

financial crisis

• _{The GFC could lead to regulatory}

action affecting auditors

– _{relatively little attention paid to the}

auditor’s role in the crisis

– the accounting profession and regulators

have proactively issued guidance

– auditors of banks later suffering financial

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IASB and FASB

convergence

project

• _{2002 and 2006 convergence agreements} • _{SEC issued (2008) a roadmap for the use}

of IFRS by US companies by 2014

– _{markets becoming increasingly global}

– _{new investment opportunities to US investors} – _{would make firms from different countries}

easier to compare

– _{progress toward 7 milestones to be assessed}

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Issues in IFRS-US GAAP

convergence

• _{It is not certain that the US will adopt}

IFRS

• _{Some argue that competition}

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International auditing

standards

• _{Auditing standards are also being}

internationalised

– _{have been redrafted}

– _{growing international acceptance}

• _{A move to IFRS would require US}

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International auditing

standards

• _{Both the auditing and accounting}

standards boards must deal with

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Sustainability

accounting, reporting and

assurance

• _{Companies are issuing sustainability}

reports

• _{Sustainability accounting is a subset of}

social accounting

• _{Sustainability can be regarded as meeting}

the needs of the present without compromising the ability of future generations to meet their own needs

– _{environmental protection}

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Recent developments in

sustainability reporting

• _{Global reporting initiative (2006)} • _{Accounting for carbon emissions}

• _{Sustainability reports are increasingly}

being either audited or reviewed by independent auditors

– _{companies with the most to gain from}

increasing the credibility of their reports are more likely to seek assurance

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Trends in sustainability

reporting

• _{Some companies are now seeking}

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Other non-financial

accounting and reporting

issues

• _{Water accounting applies accrual}

accounting concepts to water resources

• _{Greenhouse gas emission accounting} • _{Both attempt to provide data on}

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Summary

• _{One of the major influences on accounting}

and auditing practice and research is the growing internationalisation of accounting and auditing standards

• _{There have been recent developments in}

sustainability reporting and assurance

• _{Water accounting and greenhouse gas}

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Key terms and concepts

• _XBRL

• _{Sarbanes-Oxley Act 2002}

• _{Fair value accounting and the GFC}

• _{Auditors and the GFC}

• _{Convergence project}

• _{Sustainability accounting and assurance}

• _{Water accounting}

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