Accountancy Profession Flashcards
What does substance over form mean?
It means that assets are recorded the way they ought to be rather than just the way they would legally be treated - i.e. lease arrangements can be more like they own the asset or more like they are renting it
Offsetting is misleading - avoid this
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What does the oversight mechanism mean?
It means that a body is achieving what it set out to achieve. In the case of self-regulation, it is particularly important that the oversight mechanism be independent, to counter accusations of self-interest.
What is the ARP?
It is the accounting and reporting policy - it makes amendments and withdraws accounting standards
What is the AA?
Audit and Assurance, it is the FRC’s audit and assurance council:
- it develops standard for auditing and assurance services and their effective application
- it also develops ethical standards relating to the independence, objectivity and integrity of auditors
What is the CRR?
The corporate reporting review committee (CRR) and the financial reporting review panel (FRRP):
- makes enquiries into apparent departures from the requirements for financial statements of large companies…
- can see voluntary remedial action
- can apply to the court for an order for remedial action
What remedial action can be sought form the FRC to explain apparent departures from the requirements?
Voluntary withdrawal
Correction of the comparative figures
What is the PO?
There professional oversight team oversees the independent oversight of accountancy, audit and actuaries.
It gives statutory oversight of the supervision of the auditing profession
It does statutory monitoring of the quality of the auditing
What is PD?
Professional discipline
It is the independent investigative and disciplinary body for accountants and actuaries in the UK.
It is responsible for operating and administering an independent disciplinary scheme - the accountancy scheme - covering members of bodies such as the ICAEW
What is AP?
Actuarial policy
What can clients complain to the ICAEW about?
If a firm is in breach of an ICAEW regulation, has departed from guidance or has brought the ICAEW into disrepute.
The ICAEW does not deal with disputes over fees.
What is a consent order?
It is something that is offered when there is a case to answer but the case is not so serious as to involve exclusion from the ICAEW or having a firm’s practicing certificate suspended. Publicity under a consent order would be exactly the same as under a disciplinary committee order.
When will the accountancy and actuarial discipline board become involved in disciplinary proceedings?
When the matter is in the public interest
When things occur which may bring the accountancy profession as a whole into disrepute, who deals with it?
The professional discipline team at the FRC under the accountancy scheme
What is the prudence principle?
It states that a company should only recognise profits once they are certain but should recognise losses as soon as they are known
