Topics: International Financial Reporting Standards, Financial Reporting Council, Accounting organizations Pages: 5 (1598 words) Published: March 6, 2013
BEAM045 –Tutorial 1: T1 & T2- Financial Accounting & Reporting Please refer to Module & Assessment Handbooks for guidance and expectations on self-study and tutorial questions. Note: these are suggested solutions, presented in bullet point/note format. This is deliberate so that students are not misled into thinking that it is possible to do well in the final exam by memorising solutions. Please use the knowledge points to write a full coherent answer that conforms to the UoE grading on: http://admin.exeter.ac.uk/academic/tls/tqa/Part%208/8T%20Generic%20Assessment%20Criteria.pdf

Discussion questions Topic 1: Introduction to Accounting 1. How do different decision makers use accounting information and for what purpose? Using Accounting Information: P24: “accounting information should be designed to serve the information needs of all types of interested parties”. This is not exhaustive: Users What / Why Purpose Investors/shareholders Comparable info as per acctng standards Reliable info as audited In which companies to buy/sell/hold shares the past and potential risk/returns of their investments Dividend payment potential of organisation Banks/Lenders Liquidity of company (T3-T5) Security available in company Cashflows Creditors As above for Banks/lenders Determine credit facilities. Whether to sell to business Management Plan, manage & control business ↑ value of org’n (represented by Share Price if plc) Review remuneration, pensions and opportunities Wage bargaining Check pay correct taxes Regulations/governance Manage economy Make fiscal/tax policies Determine loan size/terms Ability to repay loans & interest


Review company profile/changes

Trade Unions Government

As for employees Reliable information in relevant format across sectors/co’s

Lecture notes introduction: Topic 1. D Also: Customers, General Public. Guidance: Appreciating and understanding users and their needs is fundamental to accounting and decision-making, and should form the basis of decision-making, and therefore your answers to assessment questions of all types.

J Fernandes


BEAM045 –Tutorial 1: T1 & T2- Financial Accounting & Reporting 2. What distinguishes financial accounting and reporting from management accounting? Key knowledge points may include: Financial Management Users External Internal Criteria Truth & fairness, stewardship, Relevance comparability Regulation Strict accounting standards (IFRS, Each company do as they please CAct, FSA); Auditing Timeliness Historic information – 3-12 months after Historic, current and forward looking, e.g. the event forecasts Frequency Annually, six-monthly for large Daily/weekly/monthly companies. Format Standard formats within standards Any format Measurement Aggregation Financial Highly aggregated (whole org) Financial and non-financial (qualitative & quantitative) Disaggregated – e.g. by department

--------------------------------------------------------------------------------------------------------------------------------------Topic 2: Financial Reporting 1. Briefly explain the following abbreviated terms and their roles in financial reporting:  FRC: stands for Financial Reporting Council. It was an independent regulator set up to promote confidence in corporate reporting and governance in the UK in 1990. It is also an umbrella body that supervises six boards regulating accounting, accountants, auditing, and actuarial practices (since 2006). The six boards are: the Auditing Practices Board, Accounting Standards Board (including the Urgent Issues Task Force), Financial Reporting Review Panel, Accountancy and Actuarial Discipline Board, Professional Oversight Board, and Board for Actuarial Standards.  ASB: standards for Accounting Standards Board. Its main role is to issue accounting standards. These include Statements of Standard Accounting Practice (SSAPs) that were issued before 1990 and Financial Reporting Standards (FRSs) thereafter. Another role of ASB is to...
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