W3_lecture_handout_slides-accounting

W3_lecture_handout_slides-accounting - Week 3 The...

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1 Week 3 The Environment of Accounting Text: Ch.4 (LO 1-7) Lecture Exercises: Extra Q on regulation; Extra on international cross-listing Self-Study Exercises: 4.2, 4.9, 4.11, 4.12, 4.13, 4.14, P.4.5, CS4.2b Announcements: Today we finalise groups Do the academic honesty module Use the Bb Outline The role of company regulation The Australian regulatory environment The role of accounting regulation The accounting conceptual framework Qualitative characteristics of financial information Accounting Assumptions Company regulation Any form of regulation must make sure that the intended benefits far outweigh potential costs Generally, the role of company regulation is to: protect the interests of all stakeholders promote a strong and vibrant economy More specifically, company regulation is about controlling and monitoring the preparation, presentation and reporting of financial information
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2 Q: Why have company regulation? Q: Why not have company regulation? Sources of regulation in Australia Australian Securities and Investments Commission (ASIC, www.asic.gov.au ) ASIC is Australia’s ‘company watchdog’ It is an enforcing agency for company law Its ultimate purpose is to protect all stakeholders but focuses more on consumers, investors and creditors It asks for and provides information to the market It scrutinises information provided by the companies It improves the performance of the financial system
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3 Sources of regulation in Australia Corporations Act 2001 (in www.comlaw.gov.au ) Part of Commonwealth legislation and Australian Constitution ASIC oversees the enforcement of ‘The Act’ by companies The Act provides guidance for companies in Australia, or companies who wish to come to Australia It includes regulation derived from accounting standards Go to: www.austlii.edu.au/au/legis/cth/consol_act/ca2001172/ E.g. Criteria for classifying proprietary companies to large Required physical format of financial records Who has to prepare annual financial reports Compliance with accounting standards and regulations What is ‘true and fair’ view of information, etc Sources of regulation in Australia Australian Securities Exchange (ASX, www.asx.com ) It regulates and supervises public listings of companies It accommodates for the exchanges shares, derivatives and fixed interest securities IPO: the road to growth and opportunity ( www.asx.com.au/professionals/pdf/asx_ipo_brochure.pdf ) ASX Listing Rules’ ( www.asx.com.au/supervision/rules_guidance/listing_rules1.htm ) E.g. see ‘ the Profit Test ’ and ‘ the Asset Test ’ under e.g. see Chapter 1: Admission criteria for listing Sources of regulation in Australia Australian Competition and Consumer Commission (ACCC, www.accc.gov.au ), whose main goal is to protect the consumer and administers the: Trade Practices Act 1974 Prices Surveillance Act 1983
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W3_lecture_handout_slides-accounting - Week 3 The...

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