Notesale: Turn your study into money

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Regulation of Accounting by Jocelys Liew
Governments acts to control and regulate the accounting and reporting of business entities
Therefore, enabling a set of standards to be met between all entities and allows accountability for
information which are to be presented to its users to enable them to make decisions
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THE CORPORATION ACT 2001
The Corporation Act 2001 is an act of the Commonwealth of Australia that outlines the laws dealing
with business entities in Australia
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The act regulates matter including the
formation of companies, duties of officers, takeovers and fundraising
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Before this form is handed in, companies need
to decide on the name of the business, the shareholder, directors and company secretary, location of
registered office and principal place of business in Australia and whether it would be governed by
Replaceable Rules or will it have its own constitution
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If it’s a public company then it’ll need to be lodged with ASIC
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Thus, the company can exist as a form of separate entity
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Current membership of FRC consist of representative from Business
Council of Australia, the G100, the Australian Shareholders Association, the Institute of Chartered
Accountants and many others
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The responsibilities of the FRC include:


Providing broad strategic direction and advice to AASB and has oversight of the process for
setting up accounting standards in Australia

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Ensuring that Australian accounting standards remain relevant and effective in achieving
their objectives
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This
can lead to confusion and misleading situations
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Therefore, allowing the present of define key terms and principle ensures that common
understanding and application is met across international setting
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

Reliability: the information is reliable because it’s faithful, free from bias and has minimal
errors
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Materiality: irrelevant information, which isn’t likely to influence user’s decision, doesn’t
need to be separately disclosed in general purpose financial report
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Prudence: can’t make wild claim as they need to be achievable but the claims can be
optimistic
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THE AASB & ACCOUNTING STANDARDS
The AASB is an independent accounting standards organisation based in Melbourne, Australia,
which consist of 13 members, including the chairman
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The other members, on the other
hand, are appointed by the FRC from the various major accounting partnerships in Australia, such
as Deloittes Touche Tohmatsu and Ernst & Young
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Standards are instructions/guidelines regarding financial reporting issues, which is an enforced or
mandated process to be applied to reporting entity
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creditors or investors)



Facilitate the Australian capital market (Eg
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THE ASIC
ASIC is an independent Australian government body and is Australia’s corporate, markets and
financial services regulator
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ASIC contributes to Australia’s reputation and wellbeing as they ensure that Australia’s financial
markets are fair and transparent and supported by confident and informed investors and consumers
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This is because of the existence of standards
which is to be met by all entities
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Governments are able to regulate and control business entities through Corporation Act,
the Financial Reporting Council (FRC), the Australian Accounting Standards Board (AASB) and
Accounting Standards, and the Australian Securities and Investment Commission (ASIC)
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D
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Nelson Accounting and Finance for WA 3A-3B
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D
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Nelson
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(2014)
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Retrieved August 21, 2014, from Australian Government Finacial
Reporting Council: http://www
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gov
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(2014, January 27)
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wikipedia

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