International Auditing Standards Case Study

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In the year 2016, the board published two copies of the reviewed International Auditing Standards that considered the integration of the United States auditing standards. The board also completed its project on integrating the United States auditing process and the International auditing Standards and announced the availability of the revised edition handbooks (Jaruga, Fijalkowska, Jaruga-Baranowska & Frendzel 2007, p. 70)
The Implication of the International Standards on the U.S Companies
The International Audit Standards was issued with the financial instruments for measurement and recognition as part of the accounting standards that might be authorized by the international organizations for listing purposes (Prather-Kinsey & Meek 2004, p.
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The standards also require the companies to separate embedded derivatives from the host contract as long as the given criteria are met. The standards establish criteria for hedging accounting for all derivatives. The hedging accounts documents the offsetting impacts of changes on the net income in the fair value. The major impacts of the standards include volatility in equity and in the income statement, require important changes in management strategies for financial risk and to business systems and processes. And additional as well modified information to the stakeholders. Hence, companies organizing their financial statements as per the International Audit Standards ought to think about the impact involved on the functional areas in processing, managing, accounting as well as controlling the financial …show more content…
The assumption and methods in estimating the fair values, information relating to risk management policies and objectives, an explanation of significant items and designated hedges of losses and gains on financial instruments are some of the extra disclosure requirements that are set by the International Auditing Standards for the companies to apply. The requirements mandate the companies to revise their internal reporting package, determine the standard accounting journals and to assess the accounting transition adjustments. Companies should also ensure that the management report encloses the probable impact on equity and the income statement of the marked fair value. Additionally, the International Auditing Standards mandates companies to adopt a clear communication strategy to rating analysts, investors, agencies as well as other stakeholders. To ensure that International Auditing Standards have been implemented successfully in a company, the company’s management ought to assess the effects of the standards

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