My presentation at Simon-page Biz Sch in 2012

FINANCIALO P E R A T I O N S

CIMA PAPER: F1

LECTURER : ABIODUN MAMORA ACCA-Affiliate |Bsc Applied Accounting

LAGOS

LESSON 1: THE REGULATORY FRAMEWORK

NEED FOR REGULATION

1. Reliability of financial information

2. Consistency

3. Uniformity for comparison

Need for harmonisation of accounting standard

2. Wider capital base spreading across national boundaries

3. Wider access to capital for finance

4. Wider business presence-Multinationals

Harmonisation Versus Standardisation


Harmonisation means the process of increasing the compatibility of accounting

practices by setting bounds to their degree of variation.

Standardisation on the other hand implies the imposition of a rigid and narrower

set of rules.

Due to the variation in accounting policies between counties full standardisation

of accounting practices is unlikely. Harmonisation is more likely, as the agreement of

a common conceptual framework of accounting may enable a closer harmonisation

of accounting practices


Element of Regulatory Framework•Local law•Local accounting standards•International accounting standard•Conceptual frameworks•Requirements of International bodies

IFRS Foundation

IASBTRUSTESS


THE TRUSTEES

The trustees are responsible for :

2.Appoint members of IASB, IFR interpretation committee and IFRS advisory

council

3.Review annual performance of IASB

4.Approve annually the budget of IASB

5.Promoting IASB and its works

International Accounting Standards Board (IASB)

IASB are responsible for developing international financial reporting standards

(IFRSs). They are completely responsible for IASB technical matters, including the

irepation and publication of IFRSs , exposure draft , withdrawal of IFRSs and final

interpretations by IFRSs interpretation committee.


IFRS ADVISORY COUNCIL

This provides a forum for organisations and individual to participate in standard

Setting process. The members are appointed by the trustees from various

background. Role of IFRS Advisory Council

• To give advise to IASB

•To inform the IASB of the view of organisations and individuals on

major standard setting project.

•To give other advise to the board or to the trustees.IFRS Interpretations committees

IFRIC has 2 main responsibilities2.Review on a timely basis new financial reporting issues not specifically addresses in IFRS3.Clarify issues where unsatisfactory or conflicting interpretations are developed


STANDARD SETTING PROCESS

1. Establish an advisory committee along side IFRS advisory committee

2. Develop and publish discussion papers for public comment

3. Produce an exposure draft for final review

4. Standard issued.

Test your understanding 1

LESSON 2: THE CONCEPTUAL FRAMEWORK

USERS OF FIANCIAL INFORMATION

The frame work identifies user groups as :

•Inventors

•Lenders

•Employees

•Business contacts i.e customers, suppliers , and competitors

•The general public

•The government i.e. Tax authoritiesObjectives of financial statement

The object of financial statement is to provide information about the

financial position (statement of financial position)

Financial performance (statement of comprehensive income)

Changes in the financial position (statement of cash flows)


Underlining Assumptions

Accruals concept

This means that financial statement should be prepared on the

basis of when transactions occur and not when they are paid.

Class work : give examples

Going concerns

This means financial statements are prepared on the basis

that the enterprise will continue trading for the foreseeable

future. It is assumed that the enterprise neither have an

intention nor the need to liquidate or significantly reduce the

scale of its operations


Qualitative Characteristics of Financial Statements

The framework discusses 4 make financial information useful to users

2.Understandability

3.Relevance

4.Reliability

5.comparability Elements of Financial Statement

Assets

Liabilities

Equity

Income

Expenses


Measurement of Elements of Financial Statement

There are a number of different ways of measuring the element

•Historical cost

•Current cost

•Realisable (settlement) value

•Present (discounted ) value

Test your understanding 2

LESSON 3: CODE OF ETHICS

INTRODUCTION

Chartered management accountant ( and registered student ) have

duty to observe the highest standard of conduct and integrity and to

uphold the good standing and reputation of the profession. They must

also refrain from any conduct which might discredit the profession.

What is Ethics?

Ethics relate to fairness, honesty and responsibility. Ethics are a set

of moral principles to guide behaviour.

They are important because accountant are expected to perform

their work properly.

Ethics describe “how” an entity does its business not what it does.


CIMA’s CODE OF ETHICS


Principles

5 fundamental principles form the basis of the code. They are

3.Objectivity

4.Professional competence and due care

5.Professional behaviour

6.Integrity

7.confidentialityThreatAlthough it is impossible to define all the situation that could create a threat to the fundamental principles, the code does identify 5 categories of common threat3.Self interest threat4.Self reveal threat5.Familiarity threat6.Intimidation threat7.Advocacy threat


Safeguards

In a situation where their might be a threat to any of the code’s

fundamental principles, you should first asses whether the threat is

significant. If it is , you should take reasonable action to remove or mitigate

it. Safeguards measures include whistle blowing or grievance procedure, or

can be embedded within the profession in the form of standard or

legislation.

Safeguards are also the actions that a professional accountants take to

resolve an ethical conflict or dilemma.

Resolving an Ethical Dilemma2.Gather all the relevant information3.Raise your concern internally4.Report to an external regulatory authority or body5.Consider how you can remove yourself from the situation

Illustration 1

Thanks!

Abiodun mamoraAbiodun [email protected]@gmail.com

Documents

My presentation at Simon-page Biz Sch in 2012