Chapter 8 Flashcards
the work of the accountancy profession is more important and relevant to:
the effective working of capital markets
the public interest
The objective of the accountancy profession can best be described as:
A providing financial information about an entity to external users, which is useful to them in
making economic decisions and for assessing the stewardship of the entity’s management
B measurement, disclosure or provision of assurance about financial information that helps
managers, investors, tax authorities and other decision makers make resource allocation
decisions
C identifying, measuring, accumulating, analysing, preparing, interpreting and communicating
information used by management to plan, evaluate and control an entity and to assure
appropriate use of and accountability for its resources
D managing all the processes associated with the raising and use of financial resources in a
business
B
a = financial reporting
c = mgmt accounting
d = financial mgmt
Which of the following element is least likely to characterise a profession?
A Restrictions on membership to ensure the skill and competence of members
B A high degree of autonomy and independence
C Core values are established which members are expected to maintain
D The profession’s rules and regulations are established solely by government legislation
D - professions are permitted to set out their own R+R therefore they are not ruled solely by the gov
FRC = key role in regulating the accountancy industry + ICAEW also regulates its’ own members
which areas of public accountancy practice are ‘reserved’?
insolvency
investment business
stat audit
In relation to which of the following does the Financial Reporting Council have statutory powers?
A Regulation of the auditing profession
B Professional discipline of accountants
C Registration of students into the accountancy profession
D Continuing professional education and development
A
Statement (1): Regulation of professions should protect the public from being misled or from
suffering from abuse of power through knowledge or monopoly.
Statement (2): Regulation of professions should protect the profession’s vested interests from
competition in order to maintain public trust.
Identify whether each statement is true or false.
Requirement
A Statement (1) true; Statement (2) false
B Statement (1) false; Statement (2) false
C Statement (1) true; Statement (2) true
D Statement (1) false; Statement (2) true
A
regulation of professions should specifically not protect the profession’s vested interests from competition!
The financial statements of Anson plc, a listed company, depart from relevant accounting standards
and the provisions of the Companies Act 2006. The company is likely to be referred to which of the
following regulatory bodies?
A The Prudential Regulation Authority
B The Financial Conduct Authority
C ICAEW
D The Financial Reporting Council
D
The following statements concern the role of the ICAEW.
Statement (1): The CCAB has delegated the responsibility for determining the eligibility to practice of all accountants to the ICAEW.
Statement (2): The ICAEW is only responsible for discipline in respect of ICAEW members.
Requirement
Identify whether each statement is accurate.
A Statement (1) accurate; Statement (2) inaccurate
B Statement (1) inaccurate; Statement (2) inaccurate
C Statement (1) accurate; Statement (2) accurate
D Statement (1) inaccurate; Statement (2) accurate
D
The ICAEW is responsible for eligibility to practise and discipline for ICAEW members only
Who is responsible for supervising member firms of the ICAEW in respect of anti-money laundering?
A The Financial Conduct Authority (FCA)
B The ICAEW
C The Office of Professional Body AML Supervision (OPBAS)
D HMRC
B
The ICAEW is 1/22 AML supervisory bodies in the UK, and it supervises all member firms of the ICAEW.
FCA + HMRC = recognised as AML bodies, not do not supervise members of the ICAEW
The following are potential actions that could be taken to help reduce climate change:
(1) Persuading organisations to take steps to tackle climate change
(2) Helping organisations to manage the significant risks that climate change brings
(3) Setting targets relating to climate change, comparing actual performance against targets and
interpreting the results
Which of the following actions might accountants be expected to play?
A 1 and 2 only
B 2 and 3 only
C 1 and 3 only
D 1, 2 and 3
B
Accountants are not expected to be campaigners! therefore no persuasion is necessary
they are expected to support organisations in their approach to meeting the challenges of climate change, such as risk mgmt and performance mgmt
4 Solutions to sustainability can be divided into solutions based on regulation and solutions based on
market forces.
Requirement
Which one of the following is an example of a solution based on market forces?
A Taxes and tariffs such as pollution taxes
B Green finance strategies such as green bonds
C Grants to help organisations reduce their carbon emissions
D Audits of sustainability reports to meet mandatory reporting requirements
B
regulation: taxes, grants + mandatory reporting
green finance: response by the market for finance that meets the needs of investor who wish to invest in sustainable or green projects
IFAC + aim
international federation of accountants - ICAEW is a member organisation
aim: protect the public interest by encouraging high quality practices by the world’s accountants - includes best practice guidance for professional accounts
