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TO WHAT EXTENT HAS THE ASB BEEN SUCCESSFUL IN ADDRESSING THE ISSUES IN ITS
FRS PROGRAM? INTRODUCTION Users of financial statements ...
Submitted by tateman on January 1, 2006
Category: Social Issues
Words: 1519 | Pages: 7
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INTRODUCTION
Users of financial statements require companies to report their financial performance in a way which is informative, consistent and comparable' (Higson, 1990).
The ASB are an independent accounting standards body with the objective of improving and restoring confidence in financial reporting in the UK. The ASB proceeded the ASC in 1990 following a series of large corporate failures and since has published accounting standards in accordance with a conceptual framework. The idea of a conceptual framework is not new and has been discussed in such reports as the Watts report and the Dearing report. The Dearing report concluded that the lack of a conceptual framework was a handicap to those setting accounting standards as well as to those applying them (Davies, Paterson and Wilson, 1999).
The conceptual framework or Statement of Principles' as it is more commonly referred to was published in its final form in March 2000. Chapter three of the framework identifies the qualitative characteristics of useful information. These are defined as relevance, reliability, comparability and understandability. Each individual characteristic is regarded as having equal standing. However, relevance and reliability are the key characteristics that any piece of information must have in order to be useful.' (Alexander & Britton, 1999). Davies, Paterson and Wilson (1999) agree with this and state that The qualities that distinguish between better' (more useful) information from inferior' (less useful) information are primarily the qualities of relevance and reliability, with some other characteristics that those qualities imply.' In addition, they realise that increased relevance and increased reliability are the qualities that make information a more desirable commodity.
The purpose of this report is to determine to what extent has the ASB been successful in addressing the problems reported in the...
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