Question

1. Describe the roles of ASIC, the AASB, the ASX and the FRC and the relationships between these regulatory bodies.

2. What are some of the possible cultural impediments to the international standardisation of accounting standards?

3. Distinguish between a large and a small proprietary company. What are the implications of being classified large rather than small?

4. Define the elements and recognition criteria of financial statements as per the conceptual framework?

5. What do 'probable' and 'measured reliability' mean with respect to the recognition of elements of financial accounting?

Answer 1

Answer 1.

ASIC - ASIC FULL Form is (Australian Securities and Investment Commission) which is an Independent Australian Government Body. Its role are to enforce and regulate company and financial services laws to protect Australian consumers, Investors and Creditors

AASB - Full Form (Australian Accounting Standards Board) which is an Australian Government Agency. Its role is to develop issue and maintain Accounting Standards that apply under Australian Company Law.

ASX - Full Form (Australian Securities Exchange ) it is an market operator, clearing house and payments system Facilitator. It is a body who regulate Securities market in Australian Listed Companies and helps to educate retails Investors.

FRC - Full Form (Financial Reporting Council) - It is an Independent regulator in UK which is responsible for regulate Auditors, Accountants and Actuaries and setting the UKs corporate governance.

Further if we move on the relationships between these regulatory bodies then

1. ASIC, AASB and ASX are regulating bodies of Australia whereas FRC is an Independent regulator in UK and Ireland.

2. ASIC and ASX are securities exchange bodies where as AASB and FRC are financial reporting regulating Bodies.

Answer 2. Some of the Possible cultural Impediments to the International Standardisation of Accounting Standards are given below-

i Different Countries have there own Economy i.e having different inflation, deflation, GDP, Fiscal Deficit or Implcit. which creates barriers in Standardisation of Accounting Standards

ii Different Countries have there different Taxation policy which is also a major impediments to the International Standardisation of Accounting Standards.