Sample Thesis Paper
What the board needs to be wary of is that the principle based IFRS under the IASB leave some room for interpretation in recognizing revenue and other areas which could be used to “dress up” the accounts of the company, giving a rosier picture (Ball 2006).
There is also the threat of the external auditor also functioning as the management consultant for the company which brings into question the assurance given by the auditors about the accuracy of the financial statements as they now have a “related party interest”. Such measures thwart the ability of the board to make informed decisions and thus lead to bad corporate governance (Turnbull, 1997). It highlights its importance link with accurate and transparent financial reporting.
With so many standards and steps in place, the business world is still ripe with scandals and corporate quagmires leading to big bankruptcies of major corporations around the world. Such events have a tendency to have far reaching effects.