Document 13321576

Proceedings of 11th International Business and Social Science Research Conference
8 - 9 January, 2015, Crowne Plaza Hotel, Dubai, UAE. ISBN: 978-1-922069-70-2
Designing Architecture for Credible Financial Reporting: Simple
Myth and Complex Reality
Humayun Murshed
There is a widespread recognition that credible financial reporting facilitates economic growth
through promoting investors’ confidence, development of sustainable corporate sector, mitigating
risks of financial spill overs; and enhancing transparency. Research has advocated for
implementation of global standards and best practices through implementation of IFRS and ISA for
putting in place acceptable means for ensuring credible financial reporting and global financial
stability. Several recent financial crises have proved beyond limit that crisis in individual countries
due to poor financial discipline can dislodge international financial stability. In this context, the G-20
Summit, held April 2009 in London, emphasized the adoption of “international agreed high standards
that a global financial system requires.” The Summit further pronounced that “regulators and
supervisors must protect consumers and investors, support market discipline, avoid adverse impacts
on other countries, reduce the scope of regulatory arbitrage, support competition and dynamism, and
keep pace with innovation in the marketplace.” Furthermore, it encouraged actions by emerging and
developing economies for strengthened transparency, accountability, and enhanced disclosures to
reduce the risk of market failure. However, in terms of real life context having a mechanism
conforming to global standards has mammoth challenges, and a consistent and cohesive global
action is needed for implementing international standards. This paper focuses on outlining important
components of financial reporting architecture and emphasizes the need for having a global
institutional order for ensuring credible financial reporting framework in the interest of global financial
Dr.Humayun Murshed, Associate Professor, Charles Sturt University & Senior Course Coordinator- Accounting
Program, Charles Sturt University Study Centres.