In compliance with International Financial Reporting Standards

In compliance with International Financial Reporting Standards – Any entity asserting that a set of financial statements is in compliance with IFRS complies with all applicable standards and related interpretations, and makes an explicit and unreserved statement of compliance in the notes to the financial statements. Compliance with IFRS encompasses disclosure as well as recognition and measurement requirements. [IAS 1 16] In compliance with International Financial Reporting Standards

A few examples of such a compliance statement are provided here: In compliance with International Financial Reporting Standards

In compliance with International Financial Reporting Standards

Source: Unilever Annual Report and Accounts 2018

BP Plc Annual Report and Form 20 F 2010 Statement of compliance with IFRS

Source BP Annual report and Form 20-F 2018 In compliance with International Financial Reporting Standards

The IASB does not carry out any inquiry or enforcement role regarding the application of its standards. However, this is often undertaken by local regulators and/or stock exchanges, which includes the SEC for non-US companies.  In compliance with International Financial Reporting Standards


XBRL In compliance with International Financial Reporting

eXtensible Business Reporting Language (XBRL) is a form of electronic communication whose main feature includes interactive electronic tagging of both financial and non-financial data. The IFRS Taxonomy is a translation of IFRS into XBRL. It classifies information presented and disclosed in IFRS financial statements and reflects presentation and disclosure requirements in IFRS Standards. 

The IASB is not issuing requirements to file under the IFRS Taxonomy; the submission of IFRS financial statements in XBRL is mandated by regulators in their jurisdiction.


Fair presentation

The overriding requirement of IFRS is for the financial statements to give a fair presentation (or true and fair view). Compliance with IFRS, with additional disclosure when necessary, is presumed to result in a fair presentation. [IAS 1 15] In compliance with International Financial Reporting Standards

If compliance with a requirement of an IFRS would be so misleading that it would conflict with the objective of financial reporting set out in the Conceptual Framework (see the purpose of financial reporting), then an entity departs from the required treatment to give a fair presentation, unless the relevant regulator prohibits such an override.

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If an override cannot be used because it is prohibited by the regulator, then additional disclosure is required in the notes to the financial statements. When an entity departs from a requirement of an IFRS, extensive disclosures are required, including details of the departure, the reasons for the departure and its effect. The use of a true and fair override is very rare under IFRS. [IAS 1 19 – 24]

Just some word of interest

There are four objectives that this study attempts to achieve, namely: In compliance with International Financial Reporting Standards

  1. to ascertain whether present regulatory enforcement is effective in curbing non-compliance with IFRS in Malaysia;
  2. to determine whether corporate ownership structure, culture and corporate governance attributes have a significant influence on the extent of compliance with IFRS disclosure requirements;
  3. to identify the factors of (non-) compliance with IFRS from the perceptions of preparers and auditors; and
  4. to explore the reasons why an unqualified audit report was issued despite non-compliance with IFRS disclosure requirements.

This study employs a mixed methods approach to achieve the stated objectives, where annual reports of 225 Malaysian listed companies are examined and interviews with regulators, preparers and auditors are conducted. The following findings are documented in this study. In compliance with International Financial Reporting Standards In compliance with International Financial Reporting Standards

Although compliance with accounting standards is mandated by law, this study demonstrates that no Malaysian company has fully complied with IFRS disclosure requirements. Similarly, the companies examined still receive unqualified audit reports despite significant non-compliance with IFRS disclosure requirements.

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This study argues that merely mandating compliance with accounting standards by law does not result in full compliance with accounting standards if sufficient or stringent enforcement is not in place. In compliance with International Financial Reporting Standards

The Malaysian economy is dominated by family-owned companies and government-owned companies; however, this study finds that there was not enough evidence to support the influence of these ownership types on the extent of compliance with mandatory disclosure requirements.

Despite the importance of corporate governance mechanisms in enhancing financial reporting quality, this study finds that only board meeting, audit committee size and audit committee expertise are significantly associated with the extent of compliance with IFRS disclosure requirements. In compliance with International Financial Reporting Standards

However, the association direction for audit committee expertise is puzzling, because the negative coefficient suggests that mandatory disclosure decreases with the presence of audit committee experts. This study also provides evidence that culture (ethnicity) has a significant influence on the extent of compliance with IFRS disclosure requirements.

This study also contributes to the extant literature by documenting the factors of (non-) compliance with IFRS from the perceptions of preparers and auditors.

These factors are the attitude of top management, problems with accounting standards, lack of enforcement, passive investors, materiality, accountants’ attitude, undeveloped capital markets and political excuse. These (non-)compliance factors in fact cannot be revealed by statistical analysis. In compliance with International Financial Reporting Standards

This study finds that materiality and true and fair view are the two reasons suggested by interviewees that can explain why unqualified audit opinion was expressed despite non-compliance with IFRS. In compliance with International Financial Reporting Standards

Nevertheless, this study argues that materiality and true and fair view override might also be used (or misused) as an excuse by auditors for not qualifying audit reports in the case of significant non-compliance with IFRS disclosure requirements, given the subjective and vague concept of both materiality and true and fair view.

Something else -   Presentation and disclosure

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In compliance with International Financial Reporting Standards

Annualreporting provides financial reporting narratives using IFRS keywords and terminology for free to students and others interested in financial reporting. The information provided on this website is for general information and educational purposes only and should not be used as a substitute for professional advice. Use at your own risk. Annualreporting is an independent website and it is not affiliated with, endorsed by, or in any other way associated with the IFRS Foundation. For official information concerning IFRS Standards, visit IFRS.org or the local representative in your jurisdiction.

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