In a classic example of the pot calling the kettle black, Rose Orlik of Accountancy Age (UK) reports on a British member of Parliament (MP) accusing the Royal Bank of Scotland of distorting financial position by 50%. Her story, “MPs attack RBS’s ‘distorted’ IFRS accounting,” appeared earlier today.
Surely Steve Baker MP is incorrect in his assertion. The primary reasons for the push for IFRS is (1) accounting fraud will disappear under IFRS principles because corporate execs really want to live up to IFRS’s higher expectations, and (2) corporate execs will use their carte blanche to use judgment in reporting numbers will only do so to paint a truer picture of corporate financial position.
Since the Royal Bank of Scotland is using IFRS, it must living up to it’s higher calling. If this wasn’t so, why would it have clean audit opinions? But then, who would impugn the honesty of a respected politician. Honestly, sometimes I just don’t know what to believe.
In the US, we refer to IFRS as “Report Any Numbers You Want.”
Debit and credit – – David Albrecht