Week 1 1B2013s2 WK1 HANDOUT

The box 7 financial statements and reporting class 1

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: lass 1 !  Accounting identifies, measures, records and communicates financial information !  To parties who use the information: shareholders, creditors, regulators and other stakeholders !  Using financial statements (AASB101): ACCT1511 Rules and Principles –  Balance sheet –  (Comprehensive) Income statement –  Cash flow statement –  Statement of changes in equity !  Plus Notes 1 2 Regulatory Constraints on Reporting Components of GAAP !  The Australian Securities and Investments !  Framework for the Preparation and Presentation of Commission (ASIC) administers the Act and oversees compliance !  Corporation Act 2001: Financial Statements (The Framework). !  Accounting standards –  AASB: Australian Accounting Standards Board –  AAS: Australian Accounting Standards. !  The financial statements and notes for a financial year must give a true and fair view of: (a) the financial position and performance of the company.....s.297 –  Directors’ report –  Auditor’s opinion !  !  !  !  !  !  Accounting Standards: GAAP/ AASB/ IFRS –  The financial report for a financial year must comply with the accounting standards.... s.296 AAG: Accounting Guidance Releases. UIG: Urgent Issues Group statements. Corporations Law. ASX listing requirements. Custom and tradition. !  ASX Listing Rules (for listed companies) –  Continuous Disclosure Regime 3 4 Accounting Standards Principles Based Approach !  Generally Acceptable Accounting Principles (GAAP): common set of standards and procedures developed by the accounting profession !  IASB approach to standards setting is principles based !  Provides general guidelines rather than !  The International Accounting Standards Board (IASB) specific rules for every example develops international financial reporting standards (IFRSs) !  Relies on ethical use of professional judgement in applying standards !  The AASB develops accounting standards for Australian companies !  Principles versus Rules (i.e. Flexibility vs Consistency) !  On one hand, flexible principles may lead to more “creative !  From 2005 AASB adopted most of the content and accounting”. On the other hand, it may be easier to circumvent specific rules than the idea behind a principle. wording of the IFRSs: Harmonisation 5 6 L1 MCQ Reporting Entity !  34. The agency charged with the !  The reporting entity concept requires that administration and enforcement of the Corporations Act 2001 is the: individual reporting entities be identified by reference to the existence of users who are dependent on general purpose financial reports for information for making and evaluating resource allocation decisions (SAC 1). a. Australian Accounting Standards Board b. Australian Securities Exchange c. Australian Securities and Investments Commission d. Australian Accounting Research Foundation 7 8 Reporting Entity The Framework Sometimes a reporting entity will comprise an...
View Full Document

Ask a homework question - tutors are online