Can we all agree?

Article Abstract:

Thirty-nine discussion topics are identified and briefly discussed, in light of the proposed review of the Statement of Standard Accounting Practice (SSAP) No. 2 issued by the Accounting Standards Committee of the Institute of Chartered Accountants in England and Wales. Among the topics listed are: (1) accountants should be able to agree upon auditing standards relative to the preparation of financial statements, (2) financial statements should be intended for use by management and third parties, (3) corporation values should reflect revenue-generating capabilities, not merely total corporate assets, (4) specific assurances are implied in the 'true and fair' phrase found in audit opinions, (5) the fundamental accounting concepts appropriate to financial statement preparation include maintaining accountants' objectivity and ensuring that transactions are classified as to substance rather than form, (6) accounting reports should be comparable among businesses within an industry and from one reporting period to the next, (7) audits should clearly distinguish financial data from judgements on that data, and (8) the differences between accounting bases and accounting policies, and their subsequent application. Also defined are the roles of the auditors and the corporate directors in financial statement preparation, which overlap somewhat in the area of communication.

Auditing, Corporation reports, Company reports

---

A true and fair and different view

Article Abstract:

British audit opinions contain the wording 'true and fair'; the number of audit methods available according to British accounting standards results in a suggestion that the wording be amended to 'a true and fair and different view.' The proliferation of acceptable accounting standards has made it difficult for interested annual report readers to compare the operating results of various firms, even when these firms operate within the same industry. Moreover, different accounting standards can be used to adjust earnings and profits to fit stock market reactions; for example, the current bear market in Britain encourages companies to inflate their own earnings to facilitate their acquisition of other firms (and thus actually improve earnings levels). It is easier to acquire others when one's own stock is highly valued. Accounting standards are discussed in terms of the retail industry, depreciation of assets, capitalization of interest earnings, fixed asset disposals, merger and acquisition accounting, extraordinary items, and comparisons of operating results from year to year.

Disclosure statements (Accounting)

---

A matter of balance sheet presentation

Article Abstract:

The Institute of Chartered Accountants in England and Wales is proposing a new accounting standard for valuing inventories and work in progress, in response to difficulties raised by the Companies Act of 1985. Because the Act requires companies to report long-term contracts at net realizable value, whereas the existing standard requires companies to estimate profits or losses on long-term contracts when reporting their value, the law and the accounting standard appear to conflict. Under the proposed standard, revenues and costs attributable to long-term contracts and work in progress is calculated on a contract-by-contract basis. This basis of reporting requires work in progress to be stated as revenues received, less costs incurred, while allowing companies to recognize the likelihood of profits from the contract on the balance sheet under cumulative turnover as an "amount recoverable on contracts."

Accounting and auditing, Valuation, Assets (Accounting), Inventories, Inventory accounting

Similar abstracts:

• Abstracts: High hopes for a low-cal namesake. Admiral's one shot television punch
• Abstracts: Foreign exchange exposure: it's not all on the balance sheet. Benefits of netting misunderstood
• Abstracts: An empirical comparison of alternative models of the short-term interest rate. Can tax-loss selling explain the January seasonal in stock returns?
• Abstracts: An analysis of divestiture effects resulting from deregulation
• Abstracts: Effective E & T: the ball's in your court. New pathways to learning. Building societies: new ground rules for 1988

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.