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IFAI > Reg Framework > Flashcards

Reg Framework Flashcards

1
Q

What are the criteria to qualify as a micro company under UK Law?

A

At least 2 of:
Turnover < 632k
Balance Sheet Total<316k
under 10 employees

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2
Q

What are the criteria to qualify as a micro company under UK Law?

A

At least 2 of:
Turnover < 632k
Balance Sheet Total<316k
under 10 employees

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3
Q

What are the criteria to qualify as a medium company under UK Law?

A

At least 2 of:
Turnover < 36m
Balance Sheet Total<18m
under 250 employees

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4
Q

What are the criteria to qualify as a small company under UK Law?

A

At least 2 of:
Turnover < 10.2m
Balance Sheet Total<5.1m
under 50 employees

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5
Q

What are the advantages of having accounting standards?

A
  • Improve TRANSPARENCY of financial reporting
  • Make financial information easier to UNDERSTAND, more reliable and relevant
  • reduce risk of creative accounting
  • make it easier to COMPARE
  • improve UNIFORMITY
  • improve QUALITY of reporting
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6
Q

What are the disadvantages of accounting reporting standards?

A
  • standardisation does not suit all esp. if on margins
  • influence of political, economic and social CULTURE is overlooked
  • standards can be ARBITRARY
  • remove opportunity for accountants to use judgement
  • ILLUSION of precision
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7
Q

In the UK which companies must follow IFRS?

A

Listed companies, others can choose IFRS or use UK GAAP

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8
Q

What does IFRS stand for?

A

International Financial Reporting Standards

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9
Q

What is the IASB?

A

International Accounting Standards Board

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10
Q

UKGAAP regs can be followed in the UK by who? And what doesGAAP stand for?

A

Generally Accepted Accounting Principles

Any UK company except if listed.

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11
Q

Why is it good to have a regulatory framework?

A
  • FLEXIBLE , quicker to respond than legislation
  • GLOBAL approach ( harmonisation)
  • RELIABLE presentation of financial information
  • CREDIBILITY of reports if following regulations
  • REGULATES behaviour of companies and directors through standards suuch as IFRS
  • DEVELOPS social goals through environmental and Corp Social Responsibility reporting
  • COMPATIBILITY across companies and borders
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12
Q

What does the conceptual framework (constitution) which provides the basis for development of and evaluation new and existing be standards set out?

A
  • objectives of financial reporting
  • underlying assumptions
  • qualitative characteristics
  • elements of financial statements
  • concepts of capital and capital maintenance
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13
Q

What are the qualitative characteristics of the IASB conceptual framework?

A

Fundamental

  • Faithful Representation ie complete, neutral and free from error
  • relevant

Qualitative

  • Understandability
  • Vomparability
  • Verifiability
  • Timeliness
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14
Q

List 4 assumptions for preparation of accounts under the conceptual framework

A
  • Prudence
  • Going Concern Basis
  • Materiality
  • Neutral
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15
Q

List 4 advantages for having a global accounting framework?

A
  • makes global comparison easier
  • facilitates cross-border listing and raising of funds
  • common accounting language
  • makes appraising of foreign companies easier ie for takeover/ merger
  • easier for multi-nationals to prepare group accounts
  • Reduce audit costs for multi-nationals
  • improve management control for multi-nationals
  • easier to transfer accounting knowledge of across borders
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16
Q

List 4 advantages for having a global accounting framework?

A
  • makes global comparison easier
  • facilitates cross-border listing and raising of funds
  • common accounting language
  • makes appraising of foreign companies easier ie for takeover/ merger
  • easier for multi-nationals to prepare group accounts
  • Reduce audit costs for multi-nationals
  • improve management control for multi-nationals
  • easier to transfer accounting knowledge of across borders
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17
Q

List 4 disadvantages for having a global accounting framework?

A
  • cost of implementation of IFRS
  • lower level of detail compared to regulatory frameworks in some countries eg US
  • requires judgement as principle based
  • challenges in emerging economies
    - economic environment
    - incompatible legal and regulatory environment
    - concern re SMEs
    - level of preparedness
    - quality and availability of auditors
18
Q

What are the 4 levels of Carroll’s CSR pyramid?

A

From bottom to top

Economic - focus on profitability
Legal - compliance with law
Ethical - doing what is right
Philanthropic - doing what is desired

19
Q

What are the 2 approaches to standard development to reduce global accounting differences?

A

Standardisation, eg Earnings per Share

Harmonisation, reconciles national differences

20
Q

What are the 2 approaches to standard development to reduce global accounting differences?

A

Standardisation, eg Earnings per Share

Harmonisation, reconciles national differences

21
Q

Name 4 barriers to global harmonisation?

Identified by Meek and Saudagaran (1990)

A 
Legal systems
Accounting Practices and business financing
Tax system
Level of inflation
Political and economic relationships
22
Q

Which regulation sets out the Presentation of Financial Statements?

A

IAS1

23
Q

Which regulation sets out the basis for the Statement of Cash Flow?

A

IAS7

24
Q

Which regulation covers Business Combinations?

A

IFRS 3

25
Q

Which regulation covers non Current Assets held for sale and discontinued operations?

A

IFRS 5

26
Q

Which regulation covers Operating Segments?

A

IFRS 8

27
Q

Which regulation covers Consolidated Financial Statements?

A

IFRS 10

28
Q

Which regulation covers Joint Arrangement?

A

IFRS 11

29
Q

Which regulation covers Disclosure of interests in other entities?

A

IFRS 12

30
Q

Which regulation covers Fair Value Measurement?

A

IFRS 13

31
Q

Which regulation covers Revenue from Contracts with Customers

A

IFRS 15

32
Q

Which regulation covers leases?

A

IFRS 16

33
Q

Which regulation covers Inventories?

A

IAS 2

34
Q

Which regulation covers Accounting Policies, changes in accounting standards, estimates and errors?

A

IAS 08

35
Q

Which regulation covers Events after the reporting period?

A

IAS 10

36
Q

Which regulation covers Property, Plant and Equipment?

A

IAS 16

37
Q

Which regulation covers Related Party Disclosures?

A

IAS 24

38
Q

Which regulation covers (Revised) Separate Financial Statements?

A

IAS 27

39
Q

Which regulation covers Investments in Associates and Joint Ventures?

A

IAS 28

40
Q

Which regulation covers Earnings per Share?

A

IAS33

41
Q

Which regulation covers Provisions, contingent liabilities and contingent assets?

A

IAS 37

42
Q

Which regulation covers Impairment of Assets?

A

IAS 36

IFAI (5 decks)

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