Financial Accounting Regulation in the United Kingdom
In the U.K., the cstatement of intent on accounting standards¯ was issued in 1969 by the council of the ICAEW. The statement announced that standards would be produced in the future, with four objectives. Firstly, to narrow the difference and variety in accounting principles. Secondly, to disclosure the accounting bases. The third one is the disclosure of departure from established standards and the finally, is the wider exposure for major new accounting proposals.To this end, the Accounting Standards Steering Committee ( ASSC ) [ Later the name was changed to the Accounting Standards Committee (ASC) ] was set up by the ICAW to improve accounting disclosure. Since 1971, recommendations from professional accounting bodies have been in the form of Statement of Standard Accounting Practice ( SSAPs). Edey points out that the standards that have been produced fall into four types. Type 1 standards is one that states companies must tell the user what they are doing, that states that companies must disclose their accounting policies. Type 2 standard seeks uniformity of presentation, for example, it is concerned with uniform treatment of associated companies. Type 3 standard relates to the disclosure of specific items, for ex
Another very important accounting rule is the Stock Exchange. It requires that the published financial statement of listed companies contain certain types of information. Although much of this information is already required by accounting standards, the Stock Exchange also imposes additional disclosure requirement. Examples of these are publication of interim reports and a statement that shows how much of a company¯s bank loans and other borrowings are repayable within one year, between one and two years, between two and five years and in excess of five years. Listed companies are also expected to comply with the companies are required to give reasons for any significant departures from standard accounting practice. Furthermore, Companies Acts were very important in laying down the basic disclosure requirements. The 1948 Act introduced the requirement for auditors to report on whether the accounts give a true and fair view of the company¯s financial position at the end of an accounting period and of its profit or loss for that period. As a result of the 1981 Companies Act, the information not specifically required by law must be provided in order to give a true and fair view. Because the provisions of the 1981 and earlier acts are now consolidated into the Companies Act 1985 ( as amended by the Companies Act 1989 ). In conclusion, methods of financial accounting evolve and alter in response to changing business and economic needs. From time to time new regulations, such as accounting standards, will be drawn at progressive levels, and established regulations will be reviewed with the objec
Some common words found in the essay are:
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Approximate Word count = 1080
Approximate Pages = 4 (250 words per page double spaced)
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