Who Will be Policing the Adoption of IFRSs 10 and 12 on Group Accounts?
5 Pages Posted: 31 Jan 2013
Date Written: January 30, 2013
Abstract
IFRSs 10 and 12 became effective on 1st January 2013 and are applicable to reporting entities using International Financial Reporting Standards and whose objectives are to provide clear guidelines on how parent subsidiary relationship exists despite the fact that one entity may not have majority shareholding in another entity.
IFRSs 10 and 12 have therefore been formulated to reduce window dressing accounting where some reporting firms were able to obtain control in other entities and use them as special purpose vehicles despite acquiring majority shareholding (more than fifty percent).
The paper however evaluates on who would enforce adoption of IFRSs 10 and 12 as matters of control are usually regarded as confidential information and perhaps only known to directors and some senior managers. External auditors appear to be the only bridge between the general public and reporting entities in the adoption of IFRSs 10 and 12.
Keywords: IFRS 10, IFRS 12, Group Accounts, Controlling Interest, Auditor
JEL Classification: M40, M41, M49
Suggested Citation: Suggested Citation