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Accounting standards typically have several policies and guidelines companies must adhere to. International financial reporting standards (IFRS) have several policies that cover issues such as document retention, document disclosure, and conflicts of interest within the company. IFRS policies help place boundaries on certain activities that involve issues that concern outside stakeholders. Companies may need to hire licensed accountants to ensure that any national accounting standards and policies are in place for compliance purposes. Other policies and requirements may be necessary in a company’s accounting office; therefore, updates or additional policies may come at other times in the accounting environment.
Document retention is important so a business can prove transactions and other accounting items for audits and tax purposes. IFRS policies ensure a company has the proper documentation on hand at all times to prove business activities. In some cases, these policies may coincide with previous laws already in place in countries where IFRS is the national accounting standard. The policies most often place a specific number of years that a company must retain certain documents. Rules may also be in place for the destruction of documents that may be the most sensitive to a company’s operations.
Disclosure of certain documents may also be a part of overarching IFRS policies. This policy tends to coincide with the previous policy of document retention. The International Accounting Standards Board (IASB) — which is the official agency responsible for creating IFRS — may leave certain disclosure methods to a company’s discretion. The policies most often outline what expectations are in place for disclosures and the types of documents that may still be under this policy. Changes may occur here frequently in order for the IASB to ensure a market can work efficiently based on the flow of information.
Conflicts of interest are one of the most important issues in both companies and the overall accounting environment. IFRS policies declare what issues may be the most important conflicts of issues to look for and how to handle these sometimes complicated issues. The conflicts that exist may involve public accountants or those licensed to work in specific industries or with certain companies. These individuals may have an inside track on a publicly held company's private information, which can make it difficult for the accountant to not use this information for his or her own purposes. Other conflicts of interests may arise, and IFRS policies are in place to help companies through these issues as well.
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