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[Draft] Framework for Proper Financial Reporting...

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Loendersteer
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Democratic Socialists

[Draft] Framework for Proper Financial Reporting...

Postby Loendersteer » Mon Mar 15, 2021 9:52 pm

It isn't completed so far, but I just wondered what you guys think of this.
Full name is "Framework for Proper Financial Reporting Standards"
The World Assembly,

RECOGNISING the need for a proper framework for reporting financial statements, especially when it concerns trade and agreements between bilateral or multilateral relationship with other nations and companies who have multiple headquarters and factories on different areas of the world, is essential in establishing strong economies,

AFFIRMING that by laying out the foundation for proper accounting and reporting standards, it will reduce the risk of companies conducting business in foreign countries in reporting dishonest claims about their financial situation, thereby discouraging potential investors from investing on a company or that nation as a whole,

ACKNOWLEGDING that the basis by which proper accounting methods and reporting have been enacted through numerous nations throughout the World Assembly,

ACKNOWLEGDING that the lack of framework for financial matters at the World Assembly level may result in the incapacitation of the World Economy, and may affect a wide array of nations, crippling their citizens of their to make a substantial living, and may pludge the World Economy to a deep recession.

The General Assembly hereby defines:

1. COUNTRY OF ORIGIN - the county or nation in which the company was created and founded on. For the purposes of this resolution, COUNTRY OF ORIGIN will also refer to a company whose headquarters was moved to a country other than the one where it was founded on.

2. AUDITOR(s) - a person who conducts an audit, or an official inspection of an individual's or organization's accounts.

3. BRANCH - a division of a large business or organization, operating locally or having a particular function.

The World Assembly hereby detemines the following:

1. that nations in the World Assembly create an independent body of auditors inside their territories and borders to supervise companies report statements that are true and not misleading. These independent body of auditors shall consists of:

a. internal auditors - those who shall inspect financial statements that are circulated inside the company.

b. external auditors - those who shall inspect financial statements that are provided to persons outside of the company. These may include the Board of Directors and investors.

c. international auditors - those who review financial statements of companies who have branches on their country, but of which is not their country of origin.

These independent body of auditors must submit a report to the OFFICE OF PROPER CONDUCT AND ORGANIZING IN REPORTING FINANCIAL STATEMENTS (OPCORFS) summarizing the companies they auditted at the end of each year. If the company is found to be engaging in improper reporting standars, the auditors must notify the OPCORFS of it and what their decision is after the finding out the fact.

In case of misconduct by one of its members, the independent body of auditors must investigate and decide on their own whether to expel the member or appeal the issue to the OPCORFS.

2. that companies who have branches on countries other than their country of origin must submit to these independent auditors and abide by laws and resolution created on those countries.

3. that the World Assembly creates the OFFICE OF PROPER CONDUCT AND ORGANIZING IN REPORTING FINANCIAL STATEMENTS (OPCORFS), to oversee the independent bodies of auditors in each countries.

The OPCORFS is responsible for:

a. ensuring that the bodies of auditors on each country are truly independent, does not hide any special interest resulting in favoring one company over the other, and to supervise these auditors in executing their duties.

b. ensuring that a company, organization, or even a country, has the opportunity to appeal any decisions made by their independent body of auditors, and to investigate any irregularities in the decision making of these auditors.

b1. Irregularities may include, but are not limited to:
- Favoring one company over the other without proper explanation
on their reports.
- Accusation of bribery or corruption on one or more auditors.
- Failing to recognize a company's repeated errors in reporting
financial statements
- Failing to follow the standards each county has enacted in
response to this resolution
- Failing to follow the standards each country has already enacted
prior to this resolution or any standards enacted independent of
this resolution

c. Review yearly reports from the independent bodies of auditors across the World Assembly nations.

d. Establish an investigation committee in the case that a complaint is received against an independent body of auditors.

e. Releasing information to potential investors with the permission of the company in interest.

f. Ensuring the each financial statements reflect the true financial situation of the company, and does not overstate or understate.


So, I proposed this to the World Assembly already and I'm just putting it here to gain support.

The World Assembly,

RECOGNISING the need for a proper framework for reporting financial statements, especially when it concerns trade and agreements between bilateral or multilateral relationship with other nations and companies who have multiple headquarters and factories on different areas of the world, is essential in establishing strong economies,

AFFIRMING that by laying out the foundation for proper reporting standards, it will reduce the risk of companies conducting business in foreign countries in reporting dishonest claims about their financial situation, thereby discouraging potential investors from investing on a company or that nation as a whole,

ACKNOWLEGDING that the lack of framework for financial matters at the World Assembly level may result in the incapacitation of the World Economy, and may affect a wide array of nations, crippling their citizens of making a substantial living, and may pludge the World Economy to a deep recession.

The General Assembly hereby defines:

1. COUNTRY OF ORIGIN - the county or nation in which the company was created and founded on. For the purposes of this resolution, COUNTRY OF ORIGIN will also refer to a company whose headquarters was moved to a country other than the one where it was founded on.

2. AUDITOR(s) - a person who conducts an audit, or an official inspection of an individual's or organization's accounts.

3. BRANCH - a division of a large business or organization, operating locally or having a particular function.

The World Assembly hereby mandates the following:

1. that nations in the World Assembly create an independent body of auditors inside their territories and borders to supervise statements that are true and not misleading. These independent body of auditors shall consists of:

a. internal auditors - those who shall inspect financial statements that are circulated inside the company.

b. external auditors - those who shall inspect financial statements that are provided to persons outside of the company. These may include the Board of Directors and investors.

c. international auditors - those who review financial statements of companies who have branches on their country, but of which is not their country of origin.

These auditors must acquire a Certification of Application from the OPCORFS before their admission to an independent body of auditors. It is their job to ensure companies follow proper reporting on their respective countries, at the behest of these countries.

These independent body of auditors must submit a report to the OFFICE OF PROPER CONDUCT AND ORGANIZING IN REPORTING FINANCIAL STATEMENTS (OPCORFS) summarizing the companies they auditted at the end of each year. If the company is found to be engaging in improper reporting standars, the auditors must notify the OPCORFS of it and their decision after the fact.

In case of misconduct by one of its members, the independent body of auditors must investigate and decide on their own whether to expel the member or appeal the issue to the OPCORFS.

If the misconduct is allegedly committed by the entire body, then the country where the misconduct occured may request OPCORFS to investigate the allegation and refer decisions to them

2. that companies who have branches on countries other than their country of origin must submit to these independent auditors and abide by laws and resolution created on those countries.

3. that it creates the OFFICE OF PROPER CONDUCT AND ORGANIZING IN REPORTING FINANCIAL STATEMENTS (OPCORFS), to oversee the independent bodies of auditors in each countries.

The OPCORFS is responsible for:

a. ensuring that the bodies of auditors on each country are truly independent, does not hide any special interest resulting in favoring one company over the other, and to supervise these auditors in executing their duties.

b. ensuring that a company, organization, or even a country, has the opportunity to appeal any decisions made by their independent body of auditors, and to investigate any irregularities in the decision making of these auditors.

b1. Irregularities may include, but are not limited to:
- Favoring one company over the other without proper explanation
on their reports.
- Accusation of bribery or corruption on one or more auditors.
- Failing to recognize a company's repeated errors in reporting
financial statements
- Failing to follow the standards each county has enacted in
response to this resolution
- Failing to follow the standards each country has already enacted
prior to this resolution or any standards enacted independent of
this resolution

c. Review yearly reports from the independent bodies of auditors across the World Assembly nations.

d. Establish an investigation committee in the case that a complaint is received against an independent body of auditors.

e. Releasing information to potential investors with the permission of the company in interest.
Last edited by Loendersteer on Sat Apr 17, 2021 8:00 pm, edited 5 times in total.

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Ardiveds
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Postby Ardiveds » Mon Mar 15, 2021 11:23 pm

OOC: Just some quick comments. The WA doesn't 'determine' it either enacts, mandates, encourages or urges (with the first two being stronger than the last two.
Clause 3's "world assembly creates" doesn't make sense since you're already writing the whole thing from the perspective of the WA.
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Outer Sparta
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Democratic Socialists

Postby Outer Sparta » Tue Apr 13, 2021 11:20 pm

Seeing as your submitted proposal has 49 approvals as of this post, have you made any further edits or is Draft 2 your complete one?

I'm also surprised you haven't posted any updates regarding this proposal.
Last edited by Outer Sparta on Tue Apr 13, 2021 11:21 pm, edited 1 time in total.
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Loendersteer
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Postby Loendersteer » Wed Apr 14, 2021 4:39 am

Outer Sparta wrote:Seeing as your submitted proposal has 49 approvals as of this post, have you made any further edits or is Draft 2 your complete one?

I'm also surprised you haven't posted any updates regarding this proposal.

I made a few changes because I reached the word limit for the proposal, but otherwise, the draft is similar to what is on the World Assembly. I haven't posted any other updates because I was waiting for new comments and suggestions, but never received any.

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Outer Sparta
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Postby Outer Sparta » Wed Apr 14, 2021 7:05 am

Loendersteer wrote:
Outer Sparta wrote:Seeing as your submitted proposal has 49 approvals as of this post, have you made any further edits or is Draft 2 your complete one?

I'm also surprised you haven't posted any updates regarding this proposal.

I made a few changes because I reached the word limit for the proposal, but otherwise, the draft is similar to what is on the World Assembly. I haven't posted any other updates because I was waiting for new comments and suggestions, but never received any.

Surprised you haven't received much feedback at the time.
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Loendersteer
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Democratic Socialists

Postby Loendersteer » Wed Apr 14, 2021 9:43 am

Outer Sparta wrote:
Loendersteer wrote:I made a few changes because I reached the word limit for the proposal, but otherwise, the draft is similar to what is on the World Assembly. I haven't posted any other updates because I was waiting for new comments and suggestions, but never received any.

Surprised you haven't received much feedback at the time.

Yes, I was too, but it's probably because talking about finance isn't as exciting to read as the other topics.

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Outer Sparta
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Postby Outer Sparta » Wed Apr 14, 2021 9:50 am

Loendersteer wrote:
Outer Sparta wrote:Surprised you haven't received much feedback at the time.

Yes, I was too, but it's probably because talking about finance isn't as exciting to read as the other topics.

So far I'm not entirely convinced to support it since there hasn't been much feedback from the others.
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Refuge Isle
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Postby Refuge Isle » Wed Apr 14, 2021 10:29 am

Loendersteer wrote:
Outer Sparta wrote:Surprised you haven't received much feedback at the time.

Yes, I was too, but it's probably because talking about finance isn't as exciting to read as the other topics.

This and also that it was only at the top of the GA board once. Lots of people are busy these days and might not be around or active at the time it's on the top page or two of the GA. It would have been worth bumping this at some point to try and prod for feedback. But you are right, and this area is not one that I'm particularly knowledgeable about or useful in.

My biggest gripe with the proposal is the formatting styles. Indentation would have helped substantially with organisation and being able to see more clearly what item is a subsection of what other item. So we have [list=1] For list items along a numbered convention, [list=a] for items that are on an alphabetical one, and [list=i] is usually used after that if you need three levels. Those can have items nested inside one another. Your current organisational scheme is kinda hard to parse, it looks like you have a 3 -> b -> 1 and then dashes at a fourth level? Very strange.

Why have you elected to bold random nouns in the proposal such as "misconduct" and "Certification of Application"?

Why have you elected to require member nations to submit items to OPCORFS before you create OPCORFS and write what it's supposed to do?
Last edited by Refuge Isle on Wed Apr 14, 2021 11:17 am, edited 1 time in total.

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Loendersteer
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Postby Loendersteer » Wed Apr 14, 2021 2:20 pm

Refuge Isle wrote:
Loendersteer wrote:Yes, I was too, but it's probably because talking about finance isn't as exciting to read as the other topics.

This and also that it was only at the top of the GA board once. Lots of people are busy these days and might not be around or active at the time it's on the top page or two of the GA. It would have been worth bumping this at some point to try and prod for feedback. But you are right, and this area is not one that I'm particularly knowledgeable about or useful in.

My biggest gripe with the proposal is the formatting styles. Indentation would have helped substantially with organisation and being able to see more clearly what item is a subsection of what other item. So we have [list=1] For list items along a numbered convention, [list=a] for items that are on an alphabetical one, and [list=i] is usually used after that if you need three levels. Those can have items nested inside one another. Your current organisational scheme is kinda hard to parse, it looks like you have a 3 -> b -> 1 and then dashes at a fourth level? Very strange.

Why have you elected to bold random nouns in the proposal such as "misconduct" and "Certification of Application"?

Why have you elected to require member nations to submit items to OPCORFS before you create OPCORFS and write what it's supposed to do?

I would admit that I could have a better formatting style for the proposal, but if I remember correctly, they actually counted on the word limit, so I think deleted some of formatting styles I had.

I bolded those two words because I felt like they were two of the most important points in the proposal.

So, I elected to require member nations to submit items first before creating OPCORFS because I was thinking of the proposal from the bottom going up, or from the perspective of a member nation going up to the worldwide scale. So the first point was about individual bodies of auditor on each country, which is at the bottom, the Certificate of Application, which is what they need to be a part of said body; their duties, which is to submit reports to OPCORFS; and so on... The creation of the OPCORFS is at the bottom because it was the most important piece of the proposal and I laid its duties at the very bottom so that it doesn't clutter the above parts of the proposal.

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Bananaistan
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Postby Bananaistan » Wed Apr 14, 2021 3:50 pm

All OOC:

There a few major problems here.

The first mandate is that each nation creates a domestic body of auditors to "supervise statements that are true and not misleading". Surely auditors should "supervise" all statements?

Then a, b and c parts of this clause refer to inspecting and reviewing financial statements. That means nothing. I can download financial statements of any PLC right now (or all companies in the UK) and inspect or review their financial statements. But I won't have have achieved anything in terms of establishing whether these give a true and fair view of the company's financial position as at the balance sheet date.

And do all companies have to have internal and external auditors? Who pays for them? IRL many companies are not required to be audited if they are small enough. And only the largest companies have internal auditors.

Why have an international certificate despite these auditors only being obliged to follow local standards?

The following clause about reporting to the committee. There are two spelling errors that jump out: "auditted" and "standars". Also, what exactly is being summarised is unclear.

The misconduct stuff. There are different levels of misconduct not all of which should result in either an international investigation or withdrawal of the individual's practising certificate/audit registration.

Section 2 is meaningless. Also refers to "on countries". I assume this should be "in countries". 3a also has this issue.

3b - why should any Tom, Dick or Harry be able to appeal any decision of their local auditing supervisory authority? And investigating irregularities? What does this mean and who does it refer to when it says "these auditors"? Is that all auditors mentioned in section 1 or just the supervisory authority?

There are also further spelling errors I didn't refer to here.

In sum, there's a great big sprawling bureaucracy at international level and local level created here which doesn't really have much to do because the local auditors are only told to review or inspect the financial statements. No qualifications or requirements to be an auditor are set out either.

Also, having gone through the proposal in fine detail here now, I have to question the choice of area of effect. I see nothing in this which can be said to regulate the legal industry.

In general, a few regulations around auditing is not a framework for financial reporting standards, nor are they financial reporting standards. They're not even auditing standards. And I would question whether either WA financial reporting standards or WA auditing standards are necessary.
Delegation of the People's Republic of Bananaistan to the World Assembly
Head of delegation and the Permanent Representative: Comrade Ambassador Theodorus "Ted" Hornwood
General Assistant and Head of Security: Comrade Watchman Brian of Tarth
There was the Pope and John F. Kennedy and Jack Charlton and the three of them were staring me in the face.
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Loendersteer
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Democratic Socialists

[Submitted] Framework for Proper Financial Reporting...

Postby Loendersteer » Wed Apr 14, 2021 5:04 pm

Bananaistan wrote:All OOC:

There a few major problems here.

The first mandate is that each nation creates a domestic body of auditors to "supervise statements that are true and not misleading". Surely auditors should "supervise" all statements?

Then a, b and c parts of this clause refer to inspecting and reviewing financial statements. That means nothing. I can download financial statements of any PLC right now (or all companies in the UK) and inspect or review their financial statements. But I won't have have achieved anything in terms of establishing whether these give a true and fair view of the company's financial position as at the balance sheet date.

And do all companies have to have internal and external auditors? Who pays for them? IRL many companies are not required to be audited if they are small enough. And only the largest companies have internal auditors.

Why have an international certificate despite these auditors only being obliged to follow local standards?

The following clause about reporting to the committee. There are two spelling errors that jump out: "auditted" and "standars". Also, what exactly is being summarised is unclear.

The misconduct stuff. There are different levels of misconduct not all of which should result in either an international investigation or withdrawal of the individual's practising certificate/audit registration.

Section 2 is meaningless. Also refers to "on countries". I assume this should be "in countries". 3a also has this issue.

3b - why should any Tom, Dick or Harry be able to appeal any decision of their local auditing supervisory authority? And investigating irregularities? What does this mean and who does it refer to when it says "these auditors"? Is that all auditors mentioned in section 1 or just the supervisory authority?

There are also further spelling errors I didn't refer to here.

In sum, there's a great big sprawling bureaucracy at international level and local level created here which doesn't really have much to do because the local auditors are only told to review or inspect the financial statements. No qualifications or requirements to be an auditor are set out either.

Also, having gone through the proposal in fine detail here now, I have to question the choice of area of effect. I see nothing in this which can be said to regulate the legal industry.

In general, a few regulations around auditing is not a framework for financial reporting standards, nor are they financial reporting standards. They're not even auditing standards. And I would question whether either WA financial reporting standards or WA auditing standards are necessary.


Fair enough, though I wished I did get some feedback way before I submitted it to the World Assembly, but again, I appreciate your feedback, as well as others. If the current resolution fails at the World Assembly, then I'll work on a new draft based on some of the feedbacks I received and hope you and others could provide me feedback for that draft. All I wish is to improve on creating resolutions and it immensely helps me when I do receive feedback like these.
Thank you very much for your feedback and hope I get to improve on writing in the coming future.

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Bananaistan
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Civil Rights Lovefest

Postby Bananaistan » Thu Apr 15, 2021 1:42 am

Bananaistan wrote:Also, having gone through the proposal in fine detail here now, I have to question the choice of area of effect. I see nothing in this which can be said to regulate the legal industry.


GenSec has voted to review this proposal: challenge thread.
Delegation of the People's Republic of Bananaistan to the World Assembly
Head of delegation and the Permanent Representative: Comrade Ambassador Theodorus "Ted" Hornwood
General Assistant and Head of Security: Comrade Watchman Brian of Tarth
There was the Pope and John F. Kennedy and Jack Charlton and the three of them were staring me in the face.
Ideological Bulwark #281


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