Preparation of International Financial Report of UK and Germany

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Title: Preparation of International Financial Report of UK and Germany
Subject: Finance
Type of Paper: Dissertation
Words: 5392
INTRODUCTION
The globalisation of capital markets is an irreversible process; there are many potential benefits
of international accounting standards of mutual recognition and respect. The adoption of uniform
rules to reduce costs in order to reduce the additional information is necessary for the conduct of
business across borders. They are comparable, thereby improving the assessment and analysis of
the users of financial statements. User information is available to them to become more
confident. This is probably in order to reduce uncertainty, to promote the efficient allocation of
resources and reduce the cost of capital.
To close the accounting standards in different countries, the difference between the International
Accounting Standards Committee (IASC) was founded in 1973 by a group of professional
accounting professionals. The Inter-Agency Standing Committee to develop common standards
for accounting and global efforts to reduce the differences in international accounting and
reporting practices. In this sense, according to the international standards committee (MPC) has
been created.
Inter-Agency Standing Committee since its creation in operation for two years (1997) is
defending the unity and standardized accounting. April 2001, according to international
standards (IASB) adopted the International Accounting Standards Committee (IASC) was
established. Since then, the existing and updated by the International Accounting Standards
International Financial Reporting Standards, are known as International Financial Reporting
Standards (IFRS).
In the UK, it is essential that all national companies in accordance with Company Law, most of
the provisions applicable to all companies in the UK, regardless of size. All companies are
required to prepare their financial statements to its shareholders. Except for very small firms, the
accounts must be approved by the auditor of England.
Account the liability of directors, and shall comply with the UK accounting, which is the legal
and accounting standards of the company. 1985 law includes reserve accounts show a true and
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fair. It can be used to prove superior to any other legal requirements and accounting standards,
the true picture. Financial Reporting Council (FRC), founded in 1990, is responsible for setting
accounting standards in the UK.
It is an independent organisation funded by private accounting profession, Trade and Industry
(DTI) and the institution. FRC has three subsidiary bodies: Accounting Standards Board (ASB),
which is responsible for the accounting standards issued by the Working Group on Emergencies
(UITF) to the new accounting issues to provide guidance, there is no standard; Financial
Reporting Review Committee (Review Committee) is responsible for monitoring compliance.
ASB Accounting Standards briefly clearly linked with the fundamental principles, and will not
produce a lot of rules to cover the entire accounting playback (CCAB 1988). There is evidence
that information, the UK Financial, Financial Reporting Review Panel of organs, improving
quality. CGAA (2002) noted that a significant improvement was observed in the last decade of
the regulatory system.
To help small business coach with a standard user account, financial reporting standards of small
entities (FRSSE), which is based on the existence of UK GAAP, have been developed ASB is
designed for small businesses.
UK domestic companies listed on the London Stock Exchange in shares or other securities
should be in accordance with the UK Listing Authority (UKLA) dispositions in addition to UK
GAAP. Listen to the principle of additional requirements, such as for domestic companies to
manage the company and manage the disclosure of additional information.
Research Question
The research will focus upon following question:
 What are the reasons for differences/ what are the differences on preparation of
international financial report of UK and Germany?
Objectives/Hypotheses
This research is focused upon finding the differences between UK and Germany for preparation
of international financial report. The specific objectives are:
 To find out the reporting differences between UK and Germany for preparation of
international financial report
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 To find out the principles applied in UK and Germany for preparation of international
financial report
 To find out the issues in preparation of international financial reports in UK and Germany
 To find out the IFRS adoption process, benefits and challe