Accounting Regulatory Bodies
There are various accounting regulatory bodies that are responsible for issuing accounting standards, guidelines and clarifications in their respective countries.
-
The Sarbanes-Oxley Act of 2002 | Accounting and Ethics
The Sarbanes Oxley Act of 2002 was enacted to safeguard the interests of investors in publicly traded corporations by enhancing the dependability and accuracy of financial reports and disclosures. We’d like to emphasise six critical provisions of the Act. To begin, the Act requires both the CEO and CFO to certify in writing that their company’s financial statements and supporting disclosures correctly represent its operating results—with potential jail time for a CEO or CFO who certifies figures they know are fraudulent. This generates extremely strong incentives for the CEO and CFO to ensure that financial statements are free of material misstatements. Second, the Act established the Public Company Accounting Oversight Board to oversee the audit profession more closely. The Act empowers the Board to undertake investigations, discipline audit companies, and set a variety of standards and rules governing the creation of audit reports. Third, the Act vests the audit committee of the board of directors…
Read More » -
The International Accounting Standard Board
The International Accounting Standards Board (IASB) is an independent, standard-setting organisation of the International Financial Reporting Standards Foundation (IFRS Foundation). This organisation was established on April 1, 2001, as a successor organisation to the International Accounting Standards Committee (IASC). It is in charge of establishing International Financial Reporting Standards as well as promoting the adoption and application of these standards worldwide. Foundation The International Accounting Standards Foundation was established on December 31, 2001, as a tax-exempt organisation in the state of Delaware, in the United States of America. Also on February 6, 2001, the International Financial Reporting Standards Foundation (IFRS Foundation) was established as a tax-exempt organisation in the state of Delaware. The International Financial Reporting Standards Foundation (IFRS Foundation) is an independent, not-for-profit organisation. In the public interest, its principal purpose is to establish a single set of high-quality, easily comprehensible, enforceable, and internationally recognised International Financial Reporting Standards based on clearly stated principles,…
Read More » -
What are the Functions of IASB
International Accounting Standard Board (IASB) is an independent, private-sector body (previously known as IASC), based in London. IASB is committed to develop and approve a single set of global accounting standards (that is known as International Financial Reporting Standards), which require transparent and comparable information in the general purpose of financial statements. In this article, you will learn more about the formation of IASB, the purposes of IASB (aims of IASB) and the functions of IASB. The IASB arrogated its privately-funded accounting standard-setting responsibility for the establishment of a single set of global accounting standards (i.e. IFRS) w.e.f. 1st April 2001 From IASC, adopting all International Accounting Standards (IASs) and special interpretation committee in existence. The Board Members of IASB come from nine countries who possess diverse knowledge and skills. Each member has one vote on technical and other matters. IASB comprises more than 100 worldwide accounting and financial organisations from 80+ countries. The objectives…
Read More » -
What are Various Objectives and Functions of FASB
FASB stands for Financial Accounting Standard Board. It was established by the Security and Exchange Act in 1973, as an independent, private sector, not-for-profit organization that establishes accounting principles and accounting procedures. The body of this principle and procedures called General Accounting-Accepted Principal (GAAP). FASB regulated by the Security and Exchange Commission and the Financial Accounting Foundation. Mission of FASB The collective mission of the FASB, the Governmental Accounting Standards Board (GASB) and the FAF is to establish and improve financial accounting and reporting standards to provide useful information to investors and other users of financial reports and educate stakeholders on how to most effectively understand and implement those standards. Board Members The seven members of the FASB serve full time and, to foster their independence, are required to sever connections with the firms or institutions they served before joining the Board. While they individually have diverse backgrounds, each has a concern for investors, other users, and…
Read More » -
Cuáles son las funciones de IASB
El Consejo de Normas Internacionales de Contabilidad (IASB) es un organismo independiente del sector privado (anteriormente conocido como IASC), con sede en Londres. IASB se compromete a desarrollar y aprobar un conjunto único de normas contables globales (conocidas como Normas Internacionales de Información Financiera), que requieren información transparente y comparable en el propósito general de los estados financieros. En este artículo, aprenderá más sobre la formación de IASB, los propósitos de IASB y las funciones de IASB. El IASB arrogó su responsabilidad de establecimiento de estándares contables financiados con fondos privados para el establecimiento de un único conjunto de estándares contables globales (es decir, NIIF) desde el 1 de abril de 2001 del IASC, adoptando todas las Normas Internacionales de Contabilidad (IAS) y el comité de interpretación especial existente. Los miembros de la Junta de IASB provienen de nueve países que poseen diversos conocimientos y habilidades. Cada miembro tiene un voto sobre cuestiones técnicas y…
Read More » -
The Infamous Enron Accounting Scandal
Enron accounting scandal is one of the landmark cases pertaining to accounting and auditing ethics practices. Enron collapsed after the irregularities and misrepresentations by the company with help of their auditors Arthur Andersen were revealed. The Enron Accounting scandal caused the government to implement some serious changes, as the damage caused by this scandal can last for a long time. The most important change that was done in this matter is the restructuring of the accounting profession. This restructuring resulted in the establishment of new accounting firms, which are more qualified and competent to tackle financial matters. The second important change that was introduced was the creation of the new accounting firm. The establishment of this new accounting firm has led to an increase in the number of registered firms, which are now accountable for the activities of their employees. This is the biggest advantage of this restructuring of the accounting profession. This also helps…
Read More » -
Volkswagen Scandal – An Accounting Perspective
Introduction Every public organisation is required to be accountable for its operations not only from a financial but also social and environmental perspective (Crane & Matten 2010). There are many instances of failures due to non-compliance and non-accountability of the business. The impact of such a dilemma is severe for transnational organisations. This is reflected in the recent ‘diesel dupe’ scandal of Volkswagen (VW). The scandal is critically evaluated in this report in the context of the accounting issues, the impacted stakeholders, the motivation for the same, relevant accounting theories, and their comparison and rationale. Critical Evaluation The scandal of Volkswagen is based on altering the performance of diesel vehicles while on test mode in order to show better results. The current scope of manufacturing includes the cars under Audi and Porsche along with some Volkswagen models like Jetta, Passat, Beetle and Golf. The software of all the diesel variants has been modified deliberately to…
Read More » -
Characteristics of an Effective Financial Reporting Framework
Any effective financial reporting system needs to be a coherent one (i.e., a framework in which all the pieces fit together according to an underlying logic). Such frameworks have several characteristics: Transparency A framework should enhance the transparency of a company’s financial statements. Transparency means that users should be able to see the underlying economics of the business reflected clearly in the company’s financial statements. Full disclosure and fair presentation create transparency. Comprehensiveness To be comprehensive, a framework should encompass the full spectrum of transactions that have financial consequences. This spectrum includes not only transactions currently occurring, but also new types of transactions as they are developed. So an effective financial reporting framework is based on principles that are universal enough to provide guidance for recording both existing and newly developed transactions. Consistency An effective framework should ensure reasonable consistency across companies and time periods. In other words, similar transactions should be measured and presented…
Read More » -
The Accounting Profession Structure in Australia
The accounting profession in Australia is constructed in a similar manner to the accounting profession in the United States. Whereas in the United States there is one professional body called the American Institute of Certified Public Accountants (AICPA), in Australia there are two professional bodies – CPA Australia (CPAA) and the Chartered Accountants Australia and New Zealand (CAANZ). These two bodies are very important to the conduct of accounting in Australia. For example, it is these two bodies which accredit degrees in Australia and grant professional recognition. http://www.cpaaustralia.com.au http://www.charteredaccountantsanz.com/ They both have well-developed websites with many accounting related resources. Full members of the CPA Australia are called CPAs. Members of CAANZ are commonly called Chartered Accountants – CA’s. The two Australian professional bodies represent the profession in discussions with government and also promulgate accounting standards.
Read More » -
What is an IFRS and its impacts on accounting in Australia?
“IFRSs” is the collective term used to describe the authoritative pronouncements issued by the IASB. Technically, IFRSs comprise the following:1. two series of standards – those explicitly called International Financial Reporting Standards and the older series of International Accounting Standards, and2. two series of Interpretations – those issued by the former Standing Interpretations Committee (SIC) and those issued by the existing International Financial Reporting Interpretations Committee (IFRIC) of the IASB. Under a broad strategic direction from the FRC, the AASB has adopted IFRSs for application by entities reporting under the Corporations Act 2001 for annual reporting periods beginning on or after 1 January 2005. This is to ensure that general purpose financial statements prepared by for-profit entities in accordance with AASB standards will also be in accordance with IFRSs. The AASB has a transaction neutrality policy, which means similar transactions and events should be accounted for in a similar manner by all types of entities,…
Read More »
