Regulatory Framework

Question 0

What is the aim of the regulatory framework

Answer 0

To produce 1 global standard

Question 1

What are the 2 needs for the regulatory framework

Answer 1

1) central source of reference

2) system of enforcement of GAAP

Question 2

3 benefits of the regulatory framework

Answer 2

1) greater consistency
2) comparability
3) increase investment opportunities

Question 3

3 drawbacks of the regulatory framework

Answer 3

1) doesn’t meet local needs
2) loss of independence
3) language/translation issues

Question 4

What is the principles based approach

Answer 4

One principle for all scenarios

Question 5

3 benefits of the principles based approach

Answer 5

1) consistent
2) ‘catch all’
3) reduce excessive detail

Question 6

What is the rules based approach

Answer 6

One rule for separate scenarios

Question 7

2 benefits of the rules based approach

Answer 7

1) adapt to change

2) hard and fast

Question 8

IASB procedure to produce an IFRS

Answer 8

1) issue paper
2) IFRS AC advise
3) discussion paper (published)
4) exposure draft
5) IFRS