Purpose and importance of the international accounting standards framework Flashcards
1
Q
What do the international account standards (IAS) state?
A
They state how transactions are to be treated in financial statements.
2
Q
What do IAS ensure?
A
That financial statements are produced on a more consistent and comparable basis than if there were no standards.
3
Q
The purpose of international accounting standards are to ensure financial statements are: 7
A
Complete Understandable Reliable Comparable Relevant for decision making in line with accounting concepts consistent with auditors report
4
Q
Complete
A
Containing all main documents
5
Q
Understandable
A
for different stakeholders
6
Q
Reliable
A
showing a true and fair view, not containing any errors, bias, fraud
7
Q
Comparable
A
across different years for that business
8
Q
in line with accounting concepts
A
e.g. prudence, consistency and accruals
9
Q
Consistent with the auditors report
A
When the auditors are stating their opinion about financial statements
