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Running head: SEGMENT REPORTING
Financial Accounting (Australian): Segment Reporting
University of Affiliation
Differences between AASB 8 and old Accounting Standards or Segment Reporting
The business environment has considerably evolved owing to the changes in technology
and reporting standards. These changes call for change in the reporting framework to reflect the
due changes. Accounting bodies in different parts of the world have changed accordingly to
represent a fair vie of the financial statements. For instance, the objective of auditing has
changed. The old day auditing was used to detect errors and fraud. However, the modern day
auditing has an objective of proving a fair representation of the established accounting standards.
The AASB was adopted in the year 2009 and was able to successfully revolutionize the reporting
framework in the country. The new concept has significant differences with the old reporting
framework. Nowadays it represents a reflection of the international financial reporting standards
(IFRS) For instance, the not-for-profit entities were excluded from its application.
Rationale in adopting the management Approach
The FDA, for instance, may want to inspect my site for some reasons. Some of the most common
reason as to why the FDA conduct audits on sites is to ensure the compliance of locations with
the statutory requirements. The compliance may range from security of the sites, the safety of the
users and legality of the sites. In addition to checking the compliance, the FDA many inspect a
site in response to a reported problem.
The FDA audit requires adequate preparedness to avoid the legal consequences that may hurt the
reputation of a company. My first response to a request for inspection would be to conduct a
quick internal audit which will enable me to identify any human errors present. In addition to the
internal audit, I confirm my compliance with the legal requirements to ensure that ii have not
skipped a legal procedure in the past (Mudd, 2013).
The difference between my preparation and that of the study sponsor is the speed and attention to
details. I am in a better position to check to technical hitches, identify weak points and respond
to any problem that may be present at my site.
An audit by the IRB, however, would require a different level of preparedness. The IRB audit is
a statutory audit that requires detailed attention to some areas more than others; they are more
concerned with the weak points than the other points. I would, therefore, pay more attention to
the weaknesses (Hock, 2013).
The response from the FDA audit may cover different areas. The first category of a reply that I
would expect from the review would comprise compliance with statutory requirements. Another
area that might be present in the audit report would concern the safety. A concern for safety may
result from a response to a reported problem.
Some of the consequences that my principal investigator may face from identified problems
include fines and suspension of the operating license.
Disadvantage of using the Management Approach
One of the probing questions from an audit is the negative implications it may have on
the business’s management. For instance, an auditor may offer a qualified report regarding the
firm’s financial position as a going concern. In this case, they may indicate that a company’s
assets are valued using the liquidation values. Even if such a statement may be having some truth
in it, it may hinder a company’s expansion or recovery plans. For this reason, are very careful
when issuing reports. In case an auditor issues an unqualified report where they ought to give
qualified reports, shareholders may incur losses from the company’s dealings. They will most
likely take a legal action to the auditor for providing misleading information. The problem with
issuing a warning regarding a company that is on the brink of bankruptcy is that it may make the
situation worse (Van Manen, 2015).
Another question that probes out of these audit reports is their effects on the readers in
terms of interpretation and what they really represent. Even though the two terms are distinct,
they are related and have an interactive application financial statements may be rejected if they
do not portray the market Reality. These financial statements that lack fair representation or not
being faithful, by other accounts, suc...