2. Regulatory Framework

Question 1

Why regulatory framework is important in reporting ?

Answer 1

• ensure users are informed

-ensure info is comparable and consistent

-increase confidence in users

-regulate behaviour towards investors

Question 2

What are typical elements of regulatory structure ?

Answer 2

-national reporting standards
-national law
-market regulations
-exchange rules

Question 3

How IFRS is structured ?

Answer 3

• IFRS foundation (supervisory body)

-IASB (set standards)

-IFRS advisory council (advises board)

-IFRS interpretation committee (reviews acc issues and provide guidance)

Question 4

what are IFRS objectives ?

Answer 4

-develop global accepted reporting standards

-promote these standards

-consider needs of emerging economies

-‘bridge’ national and international reporting standards

Question 5

What is the process of setting new acc standard/principle/rule ?

Answer 5

1 subject is identified and advisors are appointed

2 draft is published for public comment

3 final draft/discussions

4 publication

Question 6

What is corp. governance ?

Answer 6

System of how companies are directed/controlled

Question 7

What are elements of sound corporate governance?

Answer 7

Effective mangmnt and IC

Oversight of mngmt by NEDs

Fair reporting, remuneration and assessment of directors

Constructive relationship with shareholders

Question 8

In term of fin. reporting what is the role of directors ?

Answer 8

They must ensure proper system of reporting and IC is in place to detect and prevent fraud/errors