Predictive value
..
Complete
.
Threshold for considering an item: Would a users decision change if the information were
?
Error of £10 million in expense item. Overall profit of £500 million. Error is not material at
.% of profit.
Error of £10 million in expense item. Overall profit of £20 million. Error is material at
..% of profit.
Bad debt expense described as . Materially misleading?
C
V.
Financial Accounting
T.
U..
G.
A.
C..
P..
Asset cost £100, depreciation £10, market price if sold in crisis = £60; record .. net book
value.
Telephone paid £100, invoice due £20; recorded expense is
Inclusion of a . in accounting judgements under conditions of
uncertainty
for example, inventory (stock) valuation
uncertainty is ..
Overstatement of
Understatement of ..
Financial Accounting
Create an asset. How does the equation balance? Answer: .
Omit a liability. How does the equation balance? Answer: ..
Financial statements
Objective: Information that is useful to …
Annual reports
Mixture of regulated and non-regulated contents . is audited.
IAS Regulation
UK Company law
Requires true and fair view
Accounting rules apply to companies not following UK equivalent of IAS Regulation.
Contains other rules for management and audit of a company.
Financial Reporting Council
Authorised by the UK government to make arrangements for accounting standards, auditing
standards, oversight of professional bodies and firms and enforcement of standards.
(advised by the Audit and Assurance Council) Sets auditing standards (based on
International Standards on Auditing) and a code of ethics for auditors.
Has oversight of professional bodies and accountancy firms
Monitors compliance with .
May ask companies to . wrong accounts
Investigates complaints against accountants and applies penalties
Sets Code on Corporate Governance for directors running a company
Financial Conduct Authority
Financial Accounting
Regulates market for ..
Has accounting rules for . market
Auditors
Give opinions on true and fair view from financial statements
Conflicting views:
FOR REGULATION
(a) Supply and demand do not meet unless ..
(b) Stakeholders may lose confidence or …
(c) Scandals result where there is .
AGAINST REGULATION
(a) Market forces ensure ..
(b) Lenders will ensure they have good information for …
(c) Costs may …
Look at . in .. statements.
S..
G
P before tax
P.after tax
Trends in key figures
What kinds of .. are held?
What kind of l. are held?
What is the .? Inflow or outflow?