Regulatory framework Flashcards
why is it needed?
- ensure that fs are regulated
- ensure that FS provided to users are free from misstatement and do not give a misleading impression about the company’s financial situation
- further ensures users can make decision that are correct
main components of regulatory framework
legislation
accounting standards
stock exchange regulations
what does GAAP stand for
generally accepted accounting principles
what does GAAP mean?
refers to the whole regulatory framework which apply within a specific jurisdiction.
is there a set of globally accepted accounting regulations?
not currently but the iasb is working to achieve convergence between all the countries in the world.
what does accounting standards mean?
relate to the detailed way that transactions and other items are treated.
purpose of accounting standards
eliminate variations in accounting practices whilst introducing uniformity in financial reporting
who creates accounting standards in the UK?
the FRC (Financial Reporting Council)
is there a single set of international accounting standards?
not yet, IASB are working on it
IASB created…
IFRSs
IASC created…
IASs
