The International Research Environment
The IFRS Interpretations Committee has been criticized for not issuing enough interpretive
guidance, and for not responding in a timely manner to areas of diversity in practice. 11 This has
recently begun to change, as the IFRS Interpretations Committee has become more active in
issuing interpretive guidance in recent years. Yet, IFRS was initially heralded as being a more
principles-based reporting framework. Do you think the recent increase in interpretive guidance
is a positive development for IFRS? Explain.
1. During 2017, one of the groups just described commissioned an independent survey evaluating
how stakeholders perceive the work of the IFRS Foundation and the IASB. Among the
findings: The Foundation earned high marks on independence and transparency but identified
areas of improvement, including the complexity and timeliness of its standards.14 Which
of the groups just described would you expect to have initiated this survey process? Explain.
2. Given the IFRS Foundation’s mission, explain what value you would expect the Foundation’s
advisory bodies to bring to its standard-setting activities.
Exercises requiring basic (free) access to ifrs.org. (Become a registered user for free to access individual
These questions involve IFRS, as well as firm resources. Cite the source for each of your responses.
1. Has South Africa adopted IFRS? Describe your process for locating this information.
2. Locate an IFRS/U.S. GAAP comparison guide. Name one difference between the U.S. GAAP and IFRS requirements
related to contingent liabilities.
3. Locate IAS 7, and identify the guidance considered integral to this standard. Explain how you located this
4. Locate the most recent Form 20-F of Toyota Motor Corporation.
a. First, determine whether the financial statements were prepared in accordance with IFRS or another reporting
framework, and describe where you located this basis of preparation information.
b. Considering what you learned in this chapter, why might Toyota be permitted to prepare financial statements
for the U.S. SEC in accordance with a repotting framework other than GAAP?
c. Finally, identify Toyota’s auditor and describe the auditing standards applied by the company’s auditors.