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regulatory system of the role of accounting (company law (UK accounting…
regulatory system of the role of accounting
company law
defined
Limited companies are required by law to prepare and publish accounts annually
A company can be fined for failing to keep proper accounting records or failing to file financial statements after the year end
accounting concepts and individual judgment: financial statements are prepared on the basis of accounting concepts. Many figures in financial statements are derived from the application of judgment putting those concepts into practice
UK accounting standards
Accounting Standards Committee:detailed accounting standard rules
Financial Reporting Council and Accounting standard Board (ASB): Accounting standard principles
The Urgent Issues Task Force(UITF): An offshoot of the ASB, tackle urgent matters not covered by existing standards
Financial Reporting Review Panel(FRRP): concerning the examination and questioning of departures from accounting standards by large firms
The European Union: International Financial Reporting Standards(IFRSs)
International accounting standards board: The objective of ISAB is to develop global accounting standards, promote the use and rigorous application of the standards, and bring about convergence of national accounting standaerds
Generally Accepted Accounting Practice(GAAP): GAAP is a set of rules governing accounting which may derive from: company law, accounting standards, statutory requirements in other countries, stock exchange requirements
True and fair view
statement of financial position/balance sheet: at the end of the financial year
statement of comprehensive income/ income statement/profit or loss: for the financial year
Manual and computerized accounting systems
Manual
lower productivity/slower processing speed/ risk of error/less accessible/difficult to alter/quality of output/bulky both to handle and store
A post-it stuck on the colleague's desk with a brief message
Integrated software
only need to make one entry/extract required data from relevant files/reduce the workload of the user
more computer memory required/fewer facilities of the program
module: A module is a program which deals with one particular part of a business accounting system
A simple accounting package might consist of only one module(stand-alone module) while more likely to consist of several modules(suite) such as inventory, receivables,ledger
code: computers require information to be expressed in the forms of codes
database
database management system(DBMS) software organised into the database
various application forms(sales, payroll etc) are plugged into the DBMS software so that they can use the database.
data is the input
There is only one database so duplication is avoided
objective
It should be shared
The integrity of the database must be preserved
It should provide for the operational requirements of all its users
It should be capable of evolving
Spreadsheets: A spreadsheets is essentially an electronic piece of paper divided into rows and columns with a built in pencil
spreadsheets can be used both for accounting and other purpose