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Enterprise Risk Management Best Practices: From Assessment to Ongoing Compliance by Anne M. Marchetti

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CHAPTER TEX

Ongoing Compliance and IFRS

INTERNATIONAL FINANCIAL REPORTING STANDARDS

The Sarbanes-Oxley Act of 2002 (SOX) was a specific response to improve the accuracy and transparency of financial reports and corporate disclosures in the United States, yet the implications of the legislation have had a global reach. Following the passage of SOX, other countries have taken steps that seek to improve accuracy transparency and comparability of financial reports and disclosures. Worldwide response has come in the form of adoption of International Financial Reporting Standards (IFRS). In July 2002, the European Commission announced that publicly traded companies would be required to apply a single set of international accounting standards for the preparation of their consolidated financial statements. A number of countries followed with this same requirement. IFRS has been reported to be the “biggest thing to happen to accounting for 150 years.”

The introduction of IFRS is intended to give investors and other shareholders access to high-quality financial information that, for the first time, can be compared across international borders. IFRS is a comprehensive set of accounting principles defined and issued by the International Accounting Standards Board (IASB), an international independent standard-setting body.

Adoption of the international standards has gained significant momentum over the past several years. All European Union–listed and Australian-listed companies are required ...

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