You are the finance director of a company. At a recent shareholders’ meeting, Malcolm Jones, a shareholder, stood up in the meeting and asked why the company was still keeping the same accounting policies as last year. He explained that in his view the policies should be changed to ensure that the company was still showing profits taking into accounts the effects of the Pandemic. You told him that the policies were appropriate and the auditors who had audited the accounts gave the accounts a clean bill of health, showing that the accounting policies were ok. He was not convinced and he wanted a written reply to his question; the reply should show exactly why the policies were still appropriate. You told him you would send him a written reply in due course.

Task:

Write a professional letter to Mr Malcolm Jones responding to his query. In your letter explain the accruals concept, consistency concept and going concern concept and show clearly how these explanations address his concerns. For completeness your letter should also include a paragraph of IAS 8 accounting treatment for changes in accounting estimate

Required:

1. A professional letter format (see note below) 
2. Explanation of the concepts stated above 
3. IAS8 Accounting treatment for changes in accounting estimate