Accounting for Business 2 Flashcards
are shareholders involved in the day to day running of the company
no
who runs the company on a day to day basis
director
directors have the duty to
prepare financial statements that fairly represent the financial position and performance of the business
send a copy to the shareholders
send a copy to the registrar of companies
why are accounting rules needed
to make sure there aren’t any unfaithful directors
narrow the differences between accounts making them more comparable
why might a director be untrustworthy about accounts without the rules
under a lot of pressure to do well and scrutiny
what is a source of accounting rules
IASB
what key issues do the IFRSs deal with
what information should be disclosed
how information should be presented
how assets should be valued
how profit should be measured
by law how often must companies publish accounts
annually
under the stock exchanges how often might companies need to publish accounts
quarterly
bi annually
more detailed
what are the 3 sources of regulation
company law
stock exchange rules
international financial reporting standards
problems associated with standards
may change false conformity consensus making to agree on the best way costly complex for organisations
annuals financial reports include what three things
financial statements
corporate governance
management commentory
what is corporate governance
reports to sshreholderes on the way in which the directors have managed and controlled the business
what is the management commentary
contextual information to help understand the financial statements
what are the 5 financial statments required under IAS 1
sOFP statement of cash flows statement of changes in equity statement of comprehensive income explanatory notes
reporting standards say that the financial information should cover how long
a one year period
what is the statement of comprehensive income
extends income statment to include certain other gains and losses that effect shareholders’ equity
what is the statement of changes in equity
changes in share capital and reserves that took place during the reporting period
what is included in the management commentaryD
Directors report
strategic report
what do the notes help describe
how they got to those final figures
examples of some contents of the directors report
names of directors during that financial period
any recommended dividend
involvement of employees in the affairs of the company
likely future developments in the business
what are the main features of the strategic report
strategic management
busines enviromnet
business performance
what is included in strategic management
strategy and objectives
business model
what is included in the business environment
trends and factors
risk and uncertainties
employee, social, community and human rights mattes
what is included in the business performance
analysis of performance and position
key performance indicators
employee gender diveristy
what is IAS 8
Accouting policies, changes in accounting estimates and errors
provides comparability over time and between businesses
when can an accounting policy be changed under IAS 8
when it is required by a new financial reporting standard
it will result in more relevant and reliable information being provided for users
what does IAS 10 relate to
when financial statements should be adjusted for events that took place after the reporting period
what are teh two types of events under the IAS 10
evidence of it exists before the end of the reporting period (adjusting event)
arises are the accounting period (non adjusting event)
