Global Issues for the Finance Professional Assignment -

The coursework draws upon selected issues from Themes 1: Selected issues in Sustainability (topics 1, 2, 3) and Theme 2: Harmonization of Accounting standards (topics 4, 5, 6).

Context: This coursework will be based on Themes 1 and 2 of your study materials.

Theme 2 is concerned with the issues relating to the benefits of IFRS in general and specifically the harmonisation of IFRS procedures, whilst also addressing associated issues. Some of the benefits of harmonisation include, improvements in the rigour and quality of financial reporting, not least in the determination of earnings for the period.

In Theme 1, topic 4, the focus is on tax avoidance by large corporations. Senior management may be motivated to report earnings at lower levels than they might be without earnings management techniques. There are implications for such corporations who also claim to be developing policies in the area of Corporate Social Responsibility designed to enhance their market reputation.

Summary: Therefore, there appears to be an issue with the current system. IFRS is aimed at improving financial reporting quality, and yet despite the presence of a number of standards and procedures it is still possible for corporations to undertake earnings management which are aimed at reducing their tax liabilities. In addition, this can also expose then to accusations of playing games within the CSR arena and not taking CSR seriously enough.

Required: Identify and discuss the potential issue, outlined in the summary above, between the application of IFRS designed to improve the quality of financial reporting and earnings management designed to avoid corporation tax liabilities. In your analysis consider whether earnings management techniques, which can be thought of as tax avoidance, should be given the status of tax evasion which is effectively illegal.

Attachment:- Finance Assignment Files.rar