ACC 501 Case Assignment 1 (Accounting for Cesision Making Essay

ACC 501 Case Assignment 1 (Accounting for Cesision Making - Essay Example According to the disclosure in its Annual Review, standards appropriate to ‘current legislation’ and the company’s Articles of Association are used. As countries listed with the EU securities market use the International Financial Reporting Standards for reporting purposes, it is concluded that the parent company prepares its consolidated financial statements according to the IFRS (Weygandt, Kimmel, & Kieso, 2010). The Auditing Board of the Central Chamber of Commerce undertakes responsibility for local auditing standards within Finland, so it can also be concluded that relevant audit standards used by Fazer Group are as per ABC (DeloitteToucheTohmatsuLimited, 2013). Comparability of the income statement may be difficult as Fazer group’s income statement does not incorporate Cost of Sales or Cost of Goods Sold as an individual line item whereas Caribou’s income statement does. Fazer’s statements have specified increase or decrease in inventory stock individually whereas Caribou’s have included inventory movements within COS. This may give rise to comparability issues within the operational cost heads of the two companies (KPMG, 2012). Caribou’s statement of cash flows does not incorporate the impact of the finance cost, dividends paid and tax paid after the ‘changes in operating assets and liabilities’ segment of the cash flows from operating activities; instead the information is provided as supplementary disclosure at the end of the statement of cash flows. As per IFRS regulations, this adjustment is made in Fazer’s statement of cash flows. This, eventually, creates a discrepancy between the final figures for operating cash flows for the two companies. Conclusive statements about the companies’ performances based on the statement of cash flows cannot be drawn as a result. Purchase of the subsidiary is incorporated within the investing activities of Fazer Group; however,