Topic 2A: The Regulatory Framework Flashcards
What is national / local legislation?
In most countries, limited liability companies are required by law to prepare and publish accounts annually. The form and content is regulated by national legislation
What is accounting concepts and individual judgement?
Many figures in accounting statements are derived from the application of judgement in applying fundamental accounting assumptions and conventions. This can lead to subjectivity.
This is as working from the same data, different groups of people can produce different financial statements.
What is the essence of accounting standards?
These are created to deal with some of the subjectivity and to achieve comparability between different organisations. Developed at bot a national and international level.
What is the IFRSF?
A not for profit, public interest organisation established to develop a single set of high quality, understandable enforceable and globally accepted accounting standards and to promote facilitation of the standards
What involvement does the IFRSF have in the standard setting process?
No direct involvment
What is the IASB?
This is an independent, privately funded body with the principal aim of developing high quality accounting standards (also liases with national accounting standard setters to achieve convergence in accounting standards around the world)
What is the IFRIC?
Comprises 14 voting members appointed by members of the IFRS foundation, which issues guidance on both how to account for new financial reporting issues where there are no IFRS. Members provide the best available technical expertise
What are the two main responsiIbilities of the IFRIC?
To review, on a timely basis, newly identified financial reporting issues that not specifically addressed in the IFRS
To clarify issues where unsatisfactory or confliciting interpretations have developed or seem likely to develop in the absence of authoritative guidance, with a view to reach consensus on the appropriate treatment
What is the ISSB?
Takes into account that in recent years investors have been calling for high quality, transparent, reliable and comparable reporting by companies on environmental social and governance matters
What are the four objectives of the ISSB?
Developing standards for a global baseline of sustainabiltiy disclosures
Meeting the information needs of investors
Enabling companies to provide sustainability information to global capital markets
Facilitating interoperability that are jurisdiction specfic and aimed at broader stakeholder groups
What is the IFRS AC?
A forum used by the IASB to consult with the outside world. Consults with national standard setters, academics, user groups and other interested parties to advise the IASB
What is the essence of scope in accordance to IFRS standards?
Any limitation of applicability to a specfic IFRS standard is made clear within that standard, which are not meant to be applied to immaterial items nor they retrospective.
What is the essence of application to IFRS standards?
Within each individual country, local regulations govern, to a greater or lesser degree the issue of financial statements. These local regulations including accounting standards issued by the national regulatory bodies and/or professional accountancy bodies in the country concerned
What is the role of the IRRS standards? (4)
Provides guidance as to how transactions and events should be:
- recognised
- measured
- presented
- disclosed
in a set of financial statements
What should happen if financial statements follow accounting standards?
They should show a true and fair view
