...1. Describe the process by which the accounting standards are set in Singapore. Within the jurisdiction of Singapore, the task of prescribing accounting standards comes under the purview of the Accounting Standards Council (ASC). The ASC receives its mandate from the Accounting Standards Act, which came into effect on 01 Nov 2007. It is responsible for prescribing accounting standards for companies, charities, cooperative societies and societies in line with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB). The formulation of accounting standards in Singapore follows a formal and rigorous process that comprises four successive stages—namely exposure, reviewing of comments, post exposure and Issuance of final standards. Exposure Stage The exposure stage is triggered in response to the IASB issuing an Exposure Draft (ED) on new IFRS; amendments to existing IFRS, International Accounting Standard (IAS); a draft Interpretation of the International Financial Reporting Interpretations Committee (IFRIC) or amendment to an existing Interpretation. ASC proceeds to issue its own ED on the proposed equivalent FRS (ED FRS) or draft Interpretation (ED INT FRS) for public comments. Extensive effort is also expended to proactively seek feedback from about 50 interested parties, comprising industry associations, Governmental bodies, listed companies, banks, securities firms and academic institutions. The ASC may also...
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...The International Accounting Standards Board (IASB) is an independent group that was founded in 2001, and the IASB sole purpose is to develop international accounting standards. The have four principles that must be followed, which define an objective of financial statements; identify characteristics to make the information useful; define financial statements; and the concept of capital maintenance (Cellucci, R. 2011). Essentially, the IASB wants multinational corporations to practice the same methods of preparing their financial statements so that there would not be any misinterpretations when reviewing these documents. For instance, if ABC corporation operates in multiple nations, each country will have a different methods when preparing financial statements. This could potential lead to confusion and misunderstanding among anyone reviewing these documents, there is also potential that the information could be misrepresented hindering the company from receiving loans. The goal of the IASB is to step in with the proper procedures and to create a uniform method of accounting procedures. This will create transparency, and eliminate any negligence from operating in different countries. The Financial Accounting Standards Board (FASB) was founded in 1973 with the sole purpose of establishing and improving standards of financial accounting. FASB wants to provide accurate and useful information to investors and other viewers (FASB. 2011). The FASB is recognized only in the United...
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...of the FRC (s. 225 of ASIC Act )---Provide broad oversight of the process for setting accounting standards//Appoint members of the AASB//Approve and monitor the AASB’s priorities, business plan, budget and staffing//Give the AASB directions, advice or feedback on matters of general policy//No power to direct AASB regarding development of particular standards//No power to veto a standard//Powers expanded in 2003 to include overseeing the activities of AUASB (ASIC) is responsible for administering The Corporations Act. The Corporations Act (enforced by ASIC):--Outlines the responsibilities of company directors in relation to various activities, including the nature of their conduct, and preparation, lodgment and distribution of financial statement///Requires preparation of ‘true and fair’ financial statements by public companies, large proprietary companies, organizations with securities listed on the ASX, and some small proprietary companies. Functions of AASB--developing a conceptual framework making accounting standards that have force of law under s. 334 of the Corporations Act//formulate accounting standards for other purposes such as for entities not governed by The Corporations Law//participate in and contribute to the development of a single set of accounting standards for worldwide use ROLE OF ASX:-- 1. Reviewing applications by companies to be listed on ASX. This includes reviewing the company’s history and finances. Each company must agree to obey the ASX Listing Rules...
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...• Define accounting Accounting is a process of identifying, measuring, and communicating economic information about an organization for the purpose of making decisions and informed judgments. • Identify users of accounting information and explain why it is useful Users of accounting information include the management of the entity or organization; the owners of the organization; potential investors in and creditors of the organization; employees; and various federal, state, and local governmental agencies that are concerned with regulatory and tax matters. Management When performing the function of planning, directing, and controlling, management makes may decisions and informed judgments. Investors/shareholders When considering whether to invest in the common stock of a company investors use accounting information to help access the amounts, timing and uncertainty of future cash returns on that investment. Creditors/Suppliers When determining how much merchandise to ship to a customer before receiving payment, creditors assess the probability of collection and the risks of late or nonpayment. Banks also become creditors when they make loans and they have similar needs for accounting information. Employees When planning for retirement employees assess the company’s stability to offer long-term job prospects and an attractive retirement benefits package. SEC (Securities and When reviewing for compliance with SEC regulations, analysts determine...
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...International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) have a common relationship that is always evolving. There are several different items that have to be looked at before changes can be made. Due to changes in accounting practices, both boards have to take many things into account. They deal with companies worldwide, so they have to take a look at the customs for each country along with different accounting methods and economic differences as well. The Convergence Project involves both entities and tried to eliminate differences between the United States General Accepted Accounting Practices (GAAP) and International Financial Reporting. The Financial Accounting Foundation (FAF) formed the FASB in 1973 to try to correct accounting practices for nongovernmental businesses. The board was formed due to complaints of the Accounting Principles Board (APB). Two committees were created to handle some of the complaints. The Wheat Committee was responsible for studying how financial accounting principles would be formed. The Trueblood Committee was created to find a way to verify financial statements. The American Institute of Certified Public Accountants (AICPA) decided to implement the suggestions of the Wheat Committee. The FASB was also to be considered the official board to issue standards for financial accounting. The International Accounting Standards Committee (IASC) was the first organization formed to set accounting standards for multinational...
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... Doris Edwards ACC/541 – Accounting Theory and Research Instructor - Leslie Crews, JD, MBT March 28, 2011 Financial Accounting Standards Board History The Financial Accounting Standards Board (FASB) is a private sector organization that was established in 1973. The FASB is governed by the Financial Accounting Foundation (FAF). The FAF appoints the members of the Financial Accounting Standards Advisory Council (FASAC), the council is the entity that informs the FASB of pressing issues or topics to be reviewed (2003, Webster’s). The goal of the FASB is to set standards for financial accounting practices and the production of financial reports. The FASB works to ensure that financial reporting is; transparent, reliable, relevant, comparable, and consistent. It is the responsibility of the FASB to regularly review standards, to check for deficiencies within the current standards, and to also look for methods to improve reporting based on current day needs. As set by Section 108 of the Sarbanes-Oxley Act any standard set by the FASB is recognized to be “generally accepted” for the purpose of the federal securities laws (Schroeder, 2011). The FASB initially issued standards through two different types of pronouncements, these are more commonly known as Statements of Financial Accounting Standards (SFAS’s) and Interpretations. Today the pronouncements...
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...What is accounting and what financial statements do they prepare and in what order are the financial statements prepared? Accounting is the language of business. Accountants prepare financial statements in such a manner that they are deemed genuine, true, and accurate. This accuracy helps leadership of the company make sound business decisions. Accountants do journal entries, post them to accounts, make a trial balance, and do an income statement, a statement of retained earnings and finally a balance sheet. 2. How can financial statements help owners, managers, and creditors assess a business's performance and financial strengths? Financial statement preparation forces a company to close the books and record the company's actual financial position on a regular basis. Thus financial statements can be as valuable internally as they are externally. Managers use these booked figures to monitor measurements like debt leverage, costs, sales, assets and liabilities. Financial statements help managers assess achievement of financial goals. 3. What are some legal and professional standards that businesses and accountants practice? Accountants follow guidelines set forth by GAAP (generally accepted accounting principles), IFRS (International Financial reporting Standards), and The Financial Accounting Standards Board (FASB) The American Institute of Certified Public Accountants (AICPA) Public Company Accounting Oversight Board (PCAOB) International Accounting Standards Board (IASB)...
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...Intermediate Accounting I The Financial Accounting Standards Board (FASB) was established in 1973 in order to create and develop standards of financial accounting and reporting for the general use of the public and, in particular, users of financial information including auditors, creditors and investors. This financial information is standardized for greater clarity for the guidance and education of users (FASB org, 2009a). The primary purpose of FASB as a private and non-profit organization is to develop Generally Accepted Accounting Principles (GAAP) in the United States. The FASB sets-up accounting standards for public companies in the U.S. under the mandate of the Securities and Exchange Commission (SEC). Hence, the FASB oversees the financial security; stability and overall well-being of the U.S. economy in its role of ensuring the standardization and credibility of financial information that are made available to the public. The Financial Accounting Foundation (FAF) that was established in 1972 as an independent and private sector organization (FAF, 2009) handle the general oversight, administration and finances of the FASB. The FASB is composed of seven full time board members that have extensive knowledge and experience in accounting, finance and business, as well as ethical concern that public interests are well represented in matters pertaining to financial accounting and reporting. The board members are chosen from diverse backgrounds in the field of accounting and business...
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...Rodriguez-Boissen Financial Statement Analisys The accounting is one of the most important areas within a business. This shows us the financial position of the company. There are four financial statements which are Balance sheet, Income Statement, cash flow and changes in equity. Those statements are regulated by the FASB which has brought the GAAP to stablish the same accounting for the US business. In the International perspective is the IASB which as wrote some interpretation in the IFRS. Those one are in conversion to regulate the accounting practice in the whole world. Financial Accounting Standards Board is the independent agency that establishes accounting principles and accounting procedures which are the generally accepted accounting principles within the United States. The body of these procedures and principles are called Generally Accepted Accounting Principles. FASB was established by the Securities and Exchange Act of 1934 to be the body to set accounting standards for all public companies in the U.S. The mission of the FASB is to establish and improve standards of financial accounting and reporting that foster financial reporting by nongovernmental entities that provides decision-useful information to investors and other users of financial reports. (FASB,2014) The International Accounting Standards Board is an independent private-sector body that develops and approves International Financial Reporting Standards. The IASB operates under the oversight of the IFRS...
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...FASB Codification Project The Financial Accounting Standards Board, FASB, was implemented in 1973 in the private sector. It was meant to set up the standards for which financial accounting should operate. Its duty was to establish and improve the standards of financial accounting and reporting the financial matters to the general public as well as guiding and educating them. It also helps the auditors, issuers, and users who benefit from financial information. The FASB codification process includes all the accounting values issued by a standard setter. The standard setter is in the levels ‘A’ right through ‘D’ of the present US Generally Accepted Accounting Principles, GAAP, ladder. Also included is the American Institute of Certified Public Accountants, AICPA, and the Emerging Issues Task Force, EITF (FASB, 1984). The codification process involves the assigning of numbers or letters to documents to enable faster access to those documents as well as their retrieval. The FASB codification project will allow thousands of declarations currently in US GAAP to be organized into about 90 accounting subjects. Contents in every subject are then subdivided into subtopics followed by sections and lastly paragraphs. The paragraph is the sole part that contains the important material. The other higher levels are there to help in arranging the contents of the paragraph. A number is allocated to particular contents in each level (Smith 2005). Then the levels are displayed suitably using...
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... Abstract In the field of accounting, one important aspect of any business is their internal controls. Internal controls are defined as “a means by which an organization’s resources are directed, monitored, and measured” (http://en.wikipedia.org/wiki/Internal_control). Here in the United States, the Financial Accounting Standards Board (FASB) is responsible for setting the generally accepted accounting principles (GAAP) that must be adhered to by all companies and organizations within the states. Therefore, I have chosen to write a report to a client explaining the importance of following those rules and regulations set forth by FASB. Importance of Proper Internal Controls August 6, 2014 No Internal Control Corp. – NIC Systems Mr. John Doe Director of Finance, NIC Systems 1313 Mockingbird Lane Transylvania, CT 06666 Mr. Doe, This letter is in reference to our recent conversation, August 2, 2014, concerning the importance of implementing adequate Internal Controls at your organization. We feel we can better represent our clients and are obligated as your representative to insure we have an understanding of your internal controls and processes. Although we may not want to envision acts of fraud, employees that have been employed with organizations for a long period of time, can find ways to possibly manipulate the Accounting system and procedures. Therefore, per our discussion, I...
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...Explaining Basic Accounting Concepts and Business Structures University of Phoenix 11/20/2010 Accounting 537 Explaining Basic Accounting Concepts and Business Structures There are many important aspects of accounting. The generally accepted accounting principles are accounting rules set out for companies to follow to ensure all companies are on the same page business wise. Qualities of accounting are important in the decision making process of accounting. Accrual and cash bias methods are different ways to count revenue and will be discussed. The final area of review is the different types of business structures. Generally Accepted Accounting Principles. Generally accepted accounting principles are a set of standards and procedures (Kieso, 2007). The AICPA’S Code of Professional Conduct requires all financial statements in accordance with GAAP. The source of hierarchy is based on four categories; A, B, C, and D with A being the most authoritative and D being the least. A/CPA accounting interpretations, Implantation guides, and widely recognized and prevalent industry practices are all included in the D level. The C level is made up of emerging issues and practice bulletins. Level B is no longer issued bulletins, audit and accounting guides, and statements of position. Level A is made up of FASB standards, interpretations, and staff positions, APB Opinions, and AICPA Accounting research bulletins. The hierarchy lists the...
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...International Journal of Accounting & Information Management The role of corporate governance in convergence with IFRS: evidence from China Yu Chen Zabihollah Rezaee Downloaded by UNIVERSITI MALAYSIA SABAH At 05:16 06 October 2015 (PT) Article information: To cite this document: Yu Chen Zabihollah Rezaee, (2012),"The role of corporate governance in convergence with IFRS: evidence from China", International Journal of Accounting & Information Management, Vol. 20 Iss 2 pp. 171 - 188 Permanent link to this document: http://dx.doi.org/10.1108/18347641211218470 Downloaded on: 06 October 2015, At: 05:16 (PT) References: this document contains references to 50 other documents. To copy this document: permissions@emeraldinsight.com The fulltext of this document has been downloaded 1824 times since 2012* Users who downloaded this article also downloaded: Songlan Peng, Kathryn Bewley, (2010),"Adaptability to fair value accounting in an emerging economy: A case study of China's IFRS convergence", Accounting, Auditing & Accountability Journal, Vol. 23 Iss 8 pp. 982-1011 http://dx.doi.org/10.1108/09513571011092529 Randy Moser, (2014),"IFRS and convergence in China and the USA", Journal of Technology Management in China, Vol. 9 Iss 1 pp. 56-66 http://dx.doi.org/10.1108/JTMC-12-2013-0042 Ronita D. Singh, Susan Newberry, (2008),"Corporate governance and International Financial Reporting Standard (IFRS): The case of developing countries", Research in Accounting in Emerging Economies...
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...General Accepted Accounting Principles to International Financial Reporting Standard: The Potential Change for Leasing The United States, via the US Financial Accounting Standards Board (FASB), International Accounting Standards Board, and SEC all have begun the process to migrate from General Accepted Accounting Principles (GAAP) to the International Financial Reporting Standard (IFRS). This migration has advocates for and against the change. A major change in the IFRS proposal is the accounting of leases. One noticeable aspect of the proposals involves classifying operating leases as assets. The proposed rule would, from the lessee perspective, consider all long term leases as assets and not as operating expenses.1 The tax implications of this change would be significant, long term operating leases are currently considered expenses. Since these leases are treated as current expenses and reduce income, they are not currently taxed. A financed lease, also known in the U.S. as a capital lease, is considered an asset and therefore flows to the income statement. A financed lease increases income and is therefore paid with post tax revenue and subsequently depreciated. 3 The current IFRS proposal would classify operating leases as expenses only if those leases are 12 months or less. This change would reclassify most leases under GAAP from operating leases to finance or capital leases under IFRS. These proposed changes could have wide ranging affects on real estate, automobile...
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...using professional databases to search the authoritative literature, reviewing and evaluating the data collected, drawing conclusions and communicating your results. 2. Accounting, auditing, or tax research involve a systematic and logical investigation of an issue or problem using the accountant’s professional judgment. Furthermore, accountants approach this problem using critical-thinking skills to obtain and document evidence underlying a conclusion relating to an issue or problem currently confronting the accountant or auditor. 3. Accounting, auditing, or tax research are necessary in order to determine the proper recording, classification, and disclosure of economic events; to determine compliance with authoritative pronouncements; or to determine the preferability of alternative accounting procedures. 4. The objective of accounting, auditing, or tax research is a systematic investigation of an issue or problem utilizing the researcher’s professional judgment to arrive at appropriate and timely conclusions regarding the issues at hand. 5. Research plays an important role within an accounting firm or department. It is critical for the accountant/auditor to be able to find and locate applicable authoritative pronouncements and to ascertain their current status. Given the number and diversity of clients served, public accounting firms constantly engage in research on a wide array of accounting, auditing, or tax issues. This research process is usually conducted...
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