Financial Reporting Regulatory Framework of Poland Harvard Case Solution & Analysis

Financial Reporting Regulatory Framework of Poland Case Solution

Introduction

Since the early 1990s, Poland has undergone tremendous changes in the political, economic as well as social reforms. Therefore,according to the country’s developmental changes, its financial reporting regulatory framework also shows some amendments that would allow the businesses to develop the solicited financial statements by the use of IFRS regulatory requirements(, IAIS;, 2016). However, the reporting framework adopted by the European Union countries illustrates some options that would fit for the economic development like Poland. These include the permit for un-listed companies, build unsolicited account in accordance with the IFRS framework and many other options that are discussed in detail below(, MDDP;, 2014). Therefore, the purpose of the case is to analyze the accuracy of implementing the international financial reporting requirements within Poland.

National Legal System

Poland’s National legal system consists of the following principles and processes given below:

  • The legal system of the country is based on the principle power of Montesquieu’s separation.
  • The power of legislation consists of the lower and upper house named “Sejm” and “Senate” respectively(Warsaw, 2015).
  • The power of execution is granted to the president of the country and the ministers of the general councils, whereas the power of courts & tribunal is subjected to the judicial committee.
  • The provinces are separated into what is called “Pivot”. The country is also a member of EU.

Tax and Reporting system

The country’s taxation system is based on the federal as well as the regional systems of the government. Therefore,it shows that in 2009, the country’s tax revenues were subjected to 31.7% of the overall GDP(Secretariat, 2008). However, there are some important sources of revenues that a country generates from tax regulations below:

  • Individual income taxes
  • Sales tax (Corporate tax)
  • VAT (Value added tax)
  • Taxes on property (Real Estate)
  • Duties (Excise)
  • TCLT (Taxes imposed on Civil Law)
  • Duty under stamp

Rules-based versus principles-based

The rule-based system of the country is controlled by various authorities, which consist of the government of Poland(MacLullich, 2001), the supervision financial authority as well as the chamber of national auditors subjected to statutory rules and regulations.

On the other hand, the principle based financial reporting system in Poland consists of the act of provisions under which every company should prepare the financial reporting analysis in accordance with the principle called as “Accrual Based rule”, which indicates the balance of the amount an entity would have on the year ended.

Influence of accounting profession

In 2002, an inception of Accounting standards committee led to the increase in the critical evaluation of the problematic issues that arose by the use of transition process of the country that shifted the trends towards IFRS(Foundation, IFRS;, 2016). Thus, this committee was established by the various authorities of the country, which comprises of Polish government, the ministry of finance, chamber of the particular auditors subjected to the statutory rules and regulations as well as the independent academics of the country by region. Therefore,after all, the key to success was to implement the new accounting act, which is executing recently......................

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