Ch 1 Regulatory Framework Flashcards
What is the difference between Shareholders & Directors?
Shareholder = Owners
Directors = Run the Company, they must follow regulations & follow the law.
Companies Act 2006
Which Law do UK Companies have to follow for FS Regulations?
Companies Act 2006
Law of the land takes precedence over any other regulation.
What is known as the ‘Foundation’
The IFRS Foundation
International Financial Reporting Standards
Independent, not for profit, accounting foundation
Based in the US
What is the IFRS Foundation responsible for?
Trustee appoint members of:
IAS Board (the board)
IFRS Advisory Council
IFRS Interpretations Committee
Setting & approving budgets of var bodies.
Determining strategic direction & promoting IFRS standards.
What does IASB stand for?
Under the IFRS Foundation
The ‘Board’
The International Accounting Standards Board
IASB - What are they responsible for?
What is their aim?
Sole responsibility for the setting of International Accounting Standards.
Role - DEVELOP, APPROVE & PUBLISH.
Co-operates with other accounting standard setters.
Aim - Harmony of accountancy practice throughout the world.
Which types of Companies must prepare accounts in accordance with IFRS’s?
Companies listed on the European stock exchange PLC’s.
=London Stock Exchange
=IFRS Statements.
Decided in 2002 by the council of Ministers of the EU must prepare consolidated accounts in accordance with IFRS standards with effect of 1st JUNE 2005.
What does IFRS AC stand for?
Under the IFRS Foundation
International Financial Reporting Standards Advisory Council.
For the BOARD.
What is IFRS AC responsible for?
What are the objectives?
(Under the IFRS Foundation)
International Financial Reporting Standards Advisory Council.
Provides a forum for organisations & individuals for input into the standard-setting process.
Obj;
Advise the BOARD on agenda decisions & priorities.
Inform the BOARD of the views of organisations & individuals.
Give other advice the the BOARD or the TRUSTEES.
What does IFRIC stand for?
Under IFRS AC
International Financial Reporting Standards Interpretations Committee
Assist the BOARD.
What are the aims & responsibility of IFRIC?
What do they provide?
International Financial Reporting Standards Interpretations Committee.
Aims:
To assist the BOARD.
Establishing & improving standards of financial accounting & reporting.
Promotes the rigorous & uniform application of IFRS standards.
Provide timely guidance on:
1) Newly identified financial reporting issues not specifically covered by an accounting standard.
2) Unsatisfactory interpretations that have developed or may develop.
What is IAS?
Who created them?
International Accounting Standards
International Accounting Standards Committee - Predecessors of the BOARD.
When the BOARD was formed it adopted IAS standards in issue.
Many IAS’s have been withdrawn & superseded by IFRS standards although some remain in issue.
What are IAS’s replace/updated with?
IFRS - International Financial Reporting Standards.
Many countries have used IFRS’s for some years.
What is a PLC?
A listed company e.g on the stock exchange.
Public Limited Company.
Offers shares of stock to the general public.
Limited liability to the shareholder.
What is the Statement of Financial Position
SOFP
Position of the business.
Assets, liabilities & Capital/Equity.
At a point in time.
