“High-quality financial information is the lifeblood of capital markets”.
Critically explain your understanding of the meaning of the above statement. You are expected to prepare a critical overview of the work of the IASB and determine whether you feel that they are achieving their stated mission. You should use examples from their work programme to justify your argument(s).
Information regarding the assignment, that needs to be put into the writing.
1. Capital markets( stock and bond markets) are used by companies to raise funds.
2. For investors to have confidence that they will get their money back( hopefully with a profit when
buying shares) they need to have regular financial reports prepared to a high level of quality( i.e. to a
high standard).
3. For foreign investors, it is important for them that the company to whom they lend money or buy
shares has the same or similar financial reporting rules and standards as in their own country so that
they are easily understandable and seen to be credible.
4. The countries that have the most open borders are the strictest financial rules benefit more than
countries seem to be less “sure”.
5. Countries that are seen not to have robust reporting standards will receive less investment( local and
foreign) for their companies than those in 4). above.
6. Comment on the work of the IASB and the likelihood or not of them achieving their goal. Comment
on the impact even of large economies if they do not adopt IFRS.