F3_Session2_notes

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1、LectureNotes2010MainobjectiveofAccountingfunctionProduceComparableConsistent(steadycontinuity)AccurateandEasilyunderstandablefinancialstatementsandreports.Accountingbodiesineverycountryproducesasetofstandardsandregulationsthatallfinancialstatementsmustbeproducedinaccordancewi

2、thVaryfromCountryfromCountry,makingitdifficulttocompareandcontractthefinancialstatementsTheconceptofRegulatoryFrameworkwasintroducedin1970stoaddresstheaboveproblem.AimofRegulatoryFrameworkToproduceauniversalsetofaccountingstandardsandregulationsorInternalFinancialReportingStanda

3、rdsthatwouldtranscend(togobeyondthelimits)bordersandbeadoptedinternationally.ManycountriesinitiallyareunwillingtochangebutglobalizationchangedthesituationEveryaccountantneedtounderstandvariousregulationsandregulatorybodiesthatgovernfinancialprocessandhowtheymustbeutilizedinfinanc

4、ialreporting.RoleofRegulatorySystemTohelpensurethataccountantsproducecomparable,consistent,accurateandeasilyunderstandablefinancialstatementsandreports.Reasonsforregulatorysystems1.Separationofownershipandcontrolthatexistsformanyorganizations.Ownersreceivefrommanagementwithregard

5、stothefinancialconditionandperformanceoftheorganizationaretrueandfair.2.Toremove/reducetheelementofsubjectivityfromaccounting.Userssuchasownersandinvestorsneedclearandcomparablesinformationtoassessthefinancialconditionandperformanceofdifferentorganizations.US–USGAAP,UK-FRSfromAcc

6、ountingStandardboardUKExample:AlphaLtdandBetaLtdhavepaid$100,000forsalariestoemployees.Thisincludes$40,000ofsalariespaidtodirectorsNoregulationregardingsalaryRegulationregardingsalaryItappearsfromAlphaltd’sSOCIthatitsdirectorsdidnotreceiveanysalariesforthatparticularperiodSession2F

7、3Kris-1LectureNotes20103.Theneedforasetofuniformuniversalaccountingstandardsorinternationalfinancialreportingstandards(IFRS)Facilitatecomparingandcontrastingthefinancialconditionandperformanceoforganizationsthatoperateindifferentcountries.ExampleCertaincountries(e.g.inCentralandE

8、asternEurope,Franceetc)the