FR Regulation

The International Accounting Standards Board’s (IASB) Framework for the Preparation and Presentation of Financial Statements (Framework) is the IASB’s conceptual framework. Which one of the following does the Framework not cover?

Generally accepted accounting practice (GAAP) in a country can be based on legislation and accounting standards that are either:
• very prescriptive in nature; or
• principle-based

Required:
Explain the possible advantages of having principle-based accounting standards as opposed to prescriptive standards.

List TWO functions of the IFRS Advisory Council.

Identify the four main entities that are involved in developing and implementing International Accounting Standards. Briefly describe the role of each entity.

Which ONE of the following is a function of the IFRS Foundation?

The IASB Framework identifies several different user groups of financial statements.
List FOUR user groups identified by the Framework.

Which ONE of the following is NOT a topic included in the International Accounting Standards Board’s (IASB) Framework for the Preparation and Presentation of Financial Statements (Framework)?

Explain the roles of the following in relation to International Financial Reporting Standards.
• The IFRS Interpretations Committee
• The IFRS Advisory Council

Explain the steps in the IASB’s standard setting process that most IFRSs go through during development.

The IASB®’s Conceptual Framework for Financial Reporting lists two fundamental qualitative characteristics of financial statements, one of which is faithful representation.
Which of the following is NOT a characteristic of faithful representation?

The International Accounting Standards Board’s (The Board’s) The Conceptual Framework for Financial Reporting is the Board’s conceptual framework. Which of the following does the Framework NOT cover?

Which of the following are advantages of applying a principles‐based framework of accounting rather than a rules‐based framework?
(i) It avoids ‘fire‐fighting’, where standards are developed in response to specific
problems as they arise
(ii) It allows preparers and auditors to deal with complex transactions which may not be specifically covered by an accounting standard
(iii) Principles‐based standards are thought to be harder to circumvent
(iv) A set of rules is given which attempts to cover every eventuality
(v) Accounting standards can be developed in relation to agreed principles

One of your friends has recently decided to invest in some quoted securities. He is, however, concerned that the companies in which he is interested may have inflated their share prices by publishing misleading financial statements. He is aware that the accountancy profession has established an international standard setting body, but has read that this organisation is subject to a number of influences.

Required:

Explain how the International Accounting Standards Board goes about setting an International Financial Reporting Standard. Explain how the process could be influenced by the preparers of financial statements.