Accounting Standards

Accounting standards

a common set of principles, standards, and procedures that define the basis of financial accounting policies and procedures.

Accounting standard setting process tiered approach

• Public accountability

• Governance

• Independent standard setting made up of the International Accounting Standards Board

Who is responsible for setting the standards?

the IFRS

the due process

• Agenda consultation

• Research programme

• The Standard Setting programme

• Maintenance programme

Agenda consultation

This is a five year period to determine types of projects that need to be on the agenda.

Research programme

Exploring issues and trying to determine which issues need new standards or an update of standards

the Standard setting programme

The decision to issue of amend a standard after significant comment and consultation is invited.

Maintenance programme

Host implementation reviews that evaluate how the standard is working

IFRS

International Financial Reporting Standards

Overriding principles the IASB try to follow

• Transparency

• Full and fair consultation

• Accountability

Transparency

Meetings of the IASB and the interpretations committee are generally open to public

Full and fair consultation

Consultations are carried out through various means such as invitations to comment

Accountability

They are committed to accessing and sharing knowledge about the likely cost of implanting, the likely on-going cost and benefits of new standards

ISAB group representatives

• Preparers of general purpose financial statements

• Users of general purpose financial statements

• The auditing profession

• Academia

Small and medium sized entity

An entity that doesn’t have public accountability and publishes general purpose financial statements for external users.

International Accounting Standards Committee

• formed June 1973

• responsible for developing the international accounting standards

• replaced by the IASB in April 2001

International Accounting Standards Board purposes

• oversees the setting process for the IFRS

• developed the IFRS for small and medium entities

Difference between IFRS and IFRS for SMEs

• Significantly fewer disclosures

• Certain topics are fully excluded

• Simplified version of recognized assets, liabilities, etc.

International Federation of Accountants

The global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies