Purpose of this assignment
The manner in which items and transactions are treated and presented in the financial statements may affect an investor’s perception of the position and performance of the business. Whilst individual accounting standards can be developed to deal with specific issues it is also important that there is a framework that sets out the wider purposes that accounting standards are intended to achieve. This assignment will help you understand the importance of accounting regulations, the importance of accounting information to different user groups with varied needs and the need to present financial statements in standardized formats
Well-known Ltd. is a well-established joint stock company in the UK. They are targeting to get listed on London Stock Exchange in near future. The CEO of Well-known Ltd having very limited financial knowledge attended a conferences on IFRS and regulatory framework in the UK. He has noted the following points and requests your explanation in the form of a report.
· Why accounting regulations are important and required.
· The need for and the structure of professional regulation, company law, stock exchange Legislation and EU Directives.
· How the different aspects of regulation work together and complement each other.
· The process through which an accounting standard comes into being
· Purpose and use of financial statements
Task 1 —101 & 3 – Assessment Criteria 1.1 & 3.1 (M1, D3):
Identify various users of financial statements for Well-known Ltd. Describe their varied information needs and impact of financial information on decision making for different group of stakeholders.
To achieve pass you must;
· Identify the different users of financial statements
· Identify different financial statement prepared by Well-known limited.
· Describe the information requirements linking to various financial statement prepared
· Explain how the information needs of different user group vary
· Explain significance of financial information on decision making.
To achieve Ml, you will make effective judgements by comparing different users of financial information and how they use those information for decision making.
To achieve D3, you should show convergent and lateral thinking on how different user groups use the financial statement for decision making. You should illustrate conflicting interest of different user groups in using the financial statement for decision making.
Task 2 —101 – Assessment Criteria 1.2 (M3, D2):
As per the EU Legislation, all listed companies in European Union (w.e.f.2005) shall prepare financial statements in accordance with IFRS. Identify legal and regulatory influence on financial statements. Explain the other influence with respect to accounting regulations for listed companies at the national -and international level.
To achieve pass you must;
· Identify legal and regulatory influences.
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