Professional judgment in financial reports

Author: Michael Jenkins (Canada) Alistair K. Mason Hu Zhiying
Publisher:
Publish Date: 2005-09-01
Features: This research report examines the nature and application of professional judgment in financial reporting, specifically regarding professional judgment in accounting measurement, presentation, and disclosure, with a focus on the responsibilities of financial statement preparers and auditors. Therefore, it also pays some attention to issues in audit reports (but not audit procedures). The best description of professional judgment is a systematic analytical process for reaching objective conclusions on complex and challenging issues. At the same time, it identifies factors within procedures that hinder judgment quality and provides recommendations on eliminating and reducing these obstacles, thereby improving implementation procedures and outcomes. The relationship between professional judgment and professional standards is given special attention, and the personal qualities required of professionals, such as integrity, knowledge, and consultation, are equally emphasized. This book analyzes accounting practices and standards in Canada, the United States, the United Kingdom, and International Financial Reporting Standards. Most of the recommendations are applicable to standard setters, professional accountants, and others in all countries. However, because this research is ultimately based on Canadian research, some recommendations are particularly focused on Canada.