Critically Evaluate the Importance of Regulator in...

Users of accounting information, who do not have day to day access to the record of the business, rely on the integrity and judgment of management to provide suitable information of a high quality. All financial statements are essentially historical documents they shows the financial performance of the company. Most users of financial statements are concerned about what will happen in the future and decision making upon the present or past financial records of the company. Stockholders are concerned in future earnings and dividends. Creditors are concerned with the company’s future ability to repay its debts. Managers are concerned with the company’s ability to finance future expansions. Despite the fact that financial statements are†¦show more content†¦It is essential that the information provided in financial statements is readily understandable by users. Users are assumed to have a reasonable knowledge of business and economic activities and accounting, and a willingness to study the information with reasonable diligence. Also information has the quality of relevance when it influences the economic decisions of users by helping them evaluate past present and future events or confirming or correcting the past evaluations. Information is material and it depends on the size of the item or error judge in the particular circumstance of its omission or misstatement. The IASB framework takes the view that materiality is a cut off point whether information is important to the users. If information must be relevant but so unreliable that it could be misleading so the information must be reliable. Information has the quality of reliability when it is free from material error and bias. Comparability in a financial statement means that users must be able to compare the financial statements of enterprise overtime to identify trends in its financial position and performance. Users must also be able to compare the financial statements of different companies to evaluate their relative financial position, performance and changes. The accounting measurement principles that establish reliability and about the disclosure of information that allowsShow MoreRelatedThe Case Of Enron And Worldcom1490 Words   |  6 Pagesoffset the cost. This paper begins with the definition and brief description of statutory audit. It will then go on to address main issue by critically discuss whether the statutory audit still serves a purpose. The evidence that agree with this statement would be audit has emerged as powerful key to ensure the accountability and transparency of financial statement. 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