Comprehensive Income Calculation under IFRS: Increasing Audit Risk for Romanian Auditors

Author:Univ. Prof. Allan HODGSON; Elena NECHITA, Ph. D. Student

JEL:M41, M42

DOI:

Keywords: comprehensive income, audit risk, corporate governance, IFRS

Abstract:
International Financial Reporting Standards (IFRS) have generated a number of complicated accounting issues, one of which is comprehensive income (CI). CI contains a mixture of realised, unrealised, temporary, persistent and recyclable elements. How, when and where these elements should be reported in income and equity are issues becoming more and more important for Romanian auditors, as IFRS becomes global. This paper outlines how CI is to be calculated under IAS 1 Presentation of Financial Statements effective starting 1st July 2012, and reveals the audit risk areas identified from academic research. The authors conclude by outlining the equity posting and recycling to profit or loss (P&L) issues, noting their inconsistent nature and complexity.\r\n

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