1.4 The role of financial accouting standards

Question 1

Name four corporate failures that led to improvements in accounting standards.

Answer 1

1 Enron(2001)
2 WorldCom (2002)
3 Parmalat (2003)
4 Carillion (2018)

Question 2

What are the key objectives of financial accounting standards?

Answer 2

• improve transparency
• reduce risk of “creative accounting”
• introduce standardisation/uniformity
• improve credibility
• improve the quality of reporting