21 Your managing director has approached you saying that he is confused at all the different accounting bodies that have replaced the old Accounting Standards Committee'. You are required to draft a memorandum to your managing director explaining the pur- pose, a description of the type of work and, where applicable, examples of the work to date of the following: (a) Financial Reporting Council (3 marks) (b) Accounting Standards Board (4 marks) (c) Financial Reporting Review Panel (5 marks) (d) Urgent Issues Task Force (3 marks) CIMA, Advanced Financial Accounting, May 1993 (15 marks) 2.2 Before the introduction of accounting standards, accounting practices varied from enter- prise to enterprise - there was inconsistency and occasionally practices were inappropriate. Intercompany and inter-period comparisons were difficult as enterprises changed account- ing policies and resorted to, for example, 'window-dressing and reserve accounting'. Discuss the extent to which the publication of more than 20 accounting standards has over- come these problems. Illustrate your discussion by reference to specific accounting standards. 2.3 'At their simplest, accounts comprise a summary of cash receipts and payments. Concepts such as accruals and substance over form lead to increased complexity and may make it dif- ficult for a user to interpret the results and financial position of a company. The key focus of future accounting standards and legislation should be simplification, not increased disclo- sure and more complex rules.' Using examples, illustrate the complexities which may make it difficult for the various users to understand published accounts. Comment on any recent action taken by the Accounting Standards Board or the Government which has affected the complexity of accounts and discuss, reaching a conclusion, whether simplification of company accounts should be a key objective for the Accounting Standards Board and the Department of Trade and Industry. ICAEW, Auditing and Financial Reporting, final exam, July 1996 (12 marks) 2.4 The following is an extract from a press note published by the Financial Reporting Review Panel (FRRP): FINDINGS OF THE FINANCIAL REPORTING REVIEW PANEL IN RESPECT OF THE ACCOUNTS OF S PLC FOR THE YEAR ENDED 31 MARCH 2001 The Financial Reporting Review Panel has had under consideration the Report and Accounts of S plc for the year ended 31 March 2001 and has discussed them with the company's directors, The matters raised by the Panel related to aspects of the company's implementation of Financial Reporting Standard (FRS) 15 - Tangible Fixed Assets, regarded as standard in respect of financial statements relating to accounting periods ending on or after 23 March 2000. 21 Your managing director has approached you saying that he is confused at all the different accounting bodies that have replaced the old Accounting Standards Committee'. You are required to draft a memorandum to your managing director explaining the pur- pose, a description of the type of work and, where applicable, examples of the work to date of the following: (a) Financial Reporting Council (3 marks) (b) Accounting Standards Board (4 marks) (c) Financial Reporting Review Panel (5 marks) (d) Urgent Issues Task Force (3 marks) CIMA, Advanced Financial Accounting, May 1993 (15 marks) 2.2 Before the introduction of accounting standards, accounting practices varied from enter- prise to enterprise - there was inconsistency and occasionally practices were inappropriate. Intercompany and inter-period comparisons were difficult as enterprises changed account- ing policies and resorted to, for example, 'window-dressing and reserve accounting'. Discuss the extent to which the publication of more than 20 accounting standards has over- come these problems. Illustrate your discussion by reference to specific accounting standards. 2.3 'At their simplest, accounts comprise a summary of cash receipts and payments. Concepts such as accruals and substance over form lead to increased complexity and may make it dif- ficult for a user to interpret the results and financial position of a company. The key focus of future accounting standards and legislation should be simplification, not increased disclo- sure and more complex rules.' Using examples, illustrate the complexities which may make it difficult for the various users to understand published accounts. Comment on any recent action taken by the Accounting Standards Board or the Government which has affected the complexity of accounts and discuss, reaching a conclusion, whether simplification of company accounts should be a key objective for the Accounting Standards Board and the Department of Trade and Industry. ICAEW, Auditing and Financial Reporting, final exam, July 1996 (12 marks) 2.4 The following is an extract from a press note published by the Financial Reporting Review Panel (FRRP): FINDINGS OF THE FINANCIAL REPORTING REVIEW PANEL IN RESPECT OF THE ACCOUNTS OF S PLC FOR THE YEAR ENDED 31 MARCH 2001 The Financial Reporting Review Panel has had under consideration the Report and Accounts of S plc for the year ended 31 March 2001 and has discussed them with the company's directors, The matters raised by the Panel related to aspects of the company's implementation of Financial Reporting Standard (FRS) 15 - Tangible Fixed Assets, regarded as standard in respect of financial statements relating to accounting periods ending on or after 23 March 2000