Chairperson of IASB has set certain criteria of reporting financial information that considers that the financial information must be comparable from company and company, important for the investment financial decisions, faithful depiction of the economic reality and should be neutral that favors neither either the non-user capital of supplier that is neither seller nor buyer of the securities. In the recent days complex economic environment, particularly the capital markets considers to meet, the criteria set by the IASB because of the need of the organizations to focus on the common shareholders (Camfferman and Zeff 2015). Financial reporting these days addresses such criteria as this considers focusing on the information for the credit and investment decisions. Organizations these days are highly aware of addressing the IASB financial reporting criteria in order to offer accurate image of its performance and for addressing the needs of all user groups of such information.
Reliability of Financial Accounting Information despite Several Limitations and Publishing Such Information in Public Domain
The financial accounting information has certain limitations, which considers that financial accounting does not offer information for evaluating process because of several factors such as seasonal fluctuations in business volume. Reliability of the financial information is deemed to be relied upon in order to represent the conditions and events those are intended to be represented (Arnold 2012). Reliability of the financial information is rooted from representational verifiability, neutrality and faithfulness. Despite such limitations, reliability of the information can be determined if the information is complied with the IASB regulations of faithful representation. Financial information should be published in the public domain only if it is easily accessible to the general public member when requested by them. However, it must be considered that public domain disclosure must reveal something new. For instance, such information must be elaborative and is able to place information in new context (Camfferman and Zeff 2015).
Arnold, P.J., 2012. The political economy of financial harmonization: The East Asian financial crisis and the rise of international accounting standards. Accounting, Organizations and Society, 37(6), pp.361-381.
Camfferman, K. and Zeff, S.A., 2015. Aiming for global accounting standards: the International Accounting Standards Board, 2001-2011. Oxford University Press, USA.