Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
An overview of the
Australian external
reporting environment
1-1
1-2
1-3
1-4
1-5
1-6
1-7
1-8
1-9
1-10
ASIC (cont.)
The Corporations Act (enforced by ASIC):
Outlines the responsibilities of company directors in relation to
various activities, including:
the nature of their conduct
financial statement preparation, lodgment and distribution
1-11
ASIC (cont.)
Paragraph 10 of AASB 101 states that a complete set of financial
statements comprises:
a statement of financial position as at the end of the period
a statement of comprehensive income for the period
a statement of changes in equity for the period
a statement of cash flows for the period
notes, comprising a summary of significant accounting policies and
other explanatory notes
1-12
ASIC (cont.)
The true and fair view requirement is a central component of
Australian financial reporting
Requirement to produce true and fair financial statements contained in
s. 297 of Corporations Act:
The financial statements and notes for a financial year must give a true
and fair view of:
the financial position and performance of the company, registered
scheme or disclosing entity; and
if consolidated financial statements are required, the financial
position and performance of the consolidated entity.
1-13
ASIC (cont.)
True and fair view (cont.)
No definition of true and fair provided in the Corporations
Act.
If accounts are to be considered true and fair they
should include all information of a material nature so that
readers of financial statements are not misled but what
is material?
1-14
ASIC (cont.)Materiality
AASB 1031 (para. 9)/ IASBs Conceptual Framework (para QC11),
provides that:
Information is material if its omission, misstatement or nondisclosure has the potential, individually or collectively, to
a) Influence the economic decisions of users taken on the basis
of the financial statement, or
b) Affect the discharge of accountability by the management or
governing body of the entity.
Materiality depends on the size and nature of the omission or
misstatement judged in the surrounding circumstances.
1-15
ASIC (cont.)
Pursuant to the Corporations Act, directors of large and
listed companies, as well as some other entities, are
required to attach to financial statements a:
Directors Declaration;
Directors Report; and a
Declaration by chief executive officer and chief
financial officer
1-16
1-17
AASB (cont.)
1-18
AASB (cont.)
The application of AASB standards:
Section 231 of ASIC Act requires AASB to carry out cost
benefit analysis of impact of proposed standard before making
or formulating it.
Once the AASB makes a standard it is approved by
Commonwealth Parliament.
Once an AASB-developed standard becomes an accounting
standard, company directors are required to ensure that the
companys financial statements comply with that standard (s.
296 of Corporations Act).
1-19
AASB (cont.)
As a result of the FRC decision in 2002 that Australia
would adopt accounting standards developed by the
International
Accounting
Standards
Board,
the
development of accounting standards in Australia is no
longer directly under Australian control, except:
to the extent that a standard relates to domestic issues and
there is no equivalent IFRS.
1-20
1-21
1-22
1-23
1-24
1-25
1-26
1-27
1-28
1-29
1-30
1-31
1-32
Compliance with all the rules is costly (and when new or revised
standards are released this will create costs).
Opinions on the need for regulation vary and range between the
free-market perspective and the pro-regulation perspective .
1-33
1-34
1-35
1-36
1-37