Limitations and Inaccuracies in the Financial Reporting Process in Compliance with IFRS – Case of Financial Investment Companies
Author:
Univ. Prof. Tatiana DĂNESCU, Ph. D., Lecturer Ovidiu SPĂTĂCEAN, Ph. D. Student
JEL:
M42
DOI:
Keywords:
institutional investors, IFRS reporting, financial instruments, compliance adjustments, inherent limitations, difficulties of implementation
Abstract:
Assessing the privileged position that the investors, as providers of capital, are keeping among users of financial statements and their information needs in terms of fairness and transparency, one may justify the effort sustained by supervision and regulatory authorities of Romanian capital market, towards the adoption and implementation of IFRS for issuers of tradable financial instruments. The research approach is focused mainly on identifying solid arguments to support the need for adopting and implementing IFRS by the Financial Investment Companies, in their role as institutional investors. The area of interest is defined by features associated with financial statements issued by the Financial Investment Companies, through a comparative approach between the applicable financial reporting framework and IASB referential in order to test the correlation degree of the disclosure requirements specific to both accounting frameworks, particularly with reference to financial instruments. The case study aims to identify compliance adjustments involved by the transition to reporting under IFRS, and therefore the efforts are channeled towards the fair value measurement of financial instruments held in the portfolio of the Financial Investment Companies. Another dimension of the investigative steps taken by the authors refers to assessing the implementation stage regarding the financial reporting system under IFRS for Financial Investment Companies. Under this perspective, research directions have included the following relevant coordinates: evaluating the suitability and necessity of reporting under IFRS, identify the inherent limitations and practical difficulties related to the implementation of IFRS financial reporting process and providing solutions and recommendations for overcoming the difficulties of implementation.\r\n\r\n\r\n\r\n