CFAS 1 Flashcards
DEVELOPMENT OF FINANCIAL REPORTING FRAMEWORK AND STANDARDSETTING BODIES (21 cards)
What is general-purpose financial reporting?
Financial reports that provide information useful to a broad range of users.
Define financial accounting.
The process of recording and reporting financial transactions of a business.
What is the focus of management accounting?
Accounting focused on helping managers make informed business decisions.
Which organizations are key in financial reporting standards?
- International Accounting Standards Board (IASB)
- Financial and Sustainability Reporting Standards Council (FSRSC)
What is the primary goal of financial reporting?
To provide relevant information to investors, lenders, and creditors for decision-making.
What do general-purpose financial statements provide?
- Essential financial information at low cost
- Help multiple stakeholders make informed decisions efficiently
What is the entity perspective in accounting?
The company is separate from its investors and creditors.
What does decision-usefulness in financial statements refer to?
Financial statements should assist investors in evaluating potential future cash inflows and business performance.
Why is global comparability important in financial reporting?
A single set of high-quality standards ensures businesses across different jurisdictions can be compared effectively.
List the requirements for effective financial reporting.
- Single, authoritative standard-setting body (e.g., IASB)
- Consistency in application and interpretation
- Common disclosures and auditing practices
- Unified approach to regulatory enforcement
- Education and training for market participants
- Use of common reporting technology (e.g., XBRL)
- Standardized corporate governance and legal frameworks
Name the branches of accounting.
- Financial Accounting
- Management Accounting
- Cost Accounting
- Auditing
- Government Accounting
- Tax Accounting
- Accounting Education
- Fiduciary Accounting
- Estate Accounting
- Social Accounting
- Accounting Systems
- Accounting Research
What is the role of the International Accounting Standards Board (IASB)?
The primary body responsible for setting global financial reporting standards.
What does the IFRS Foundation do?
Provides oversight and appoints IASB members.
True or False: The International Organization of Securities Commissions (IOSCO) sets accounting rules.
False
What is the IASB’s Standard-Setting Process?
*Identify relevant topics.
*Conduct research and release discussion papers.
*Hold public hearings for stakeholder input.
*Issue an exposure draft for review.
*Evaluate feedback and finalize the standard.
What are some challenges in financial reporting?
- External Influence & Political Pressure
- Expectation Gap
- Non-Financial Measurements
- Forward-Looking Information
- Soft Assets (Intangibles)
- Timeliness
- Ethical Dilemmas
When was the Accounting Standards Council (ASC) created in the Philippines?
1981
What replaced the Accounting Standards Council (ASC) under the Philippine Accountancy Act of 2004?
The Financial and Sustainability Reporting Standards Council (FSRSC)
Fill in the blank: Philippine Financial Reporting Standards (PFRS) are based on _______.
International Financial Reporting Standards (IFRS)
What is the purpose of the FSRSC?
To ensure Philippine accounting standards remain aligned with IFRS.
What is the significance of convergence with IFRS?
Improves transparency and global market efficiency.
