Financial reporting framework
　　- Corporate governance: is the system by which companies are directed and controlled (Cadbury Report).
　　- Conceptual framework
　　The IASB’s Framework provides the backbone of the IASB‘s conceptual framework. IASs were based on the IASB Framework.
　　A conceptual framework is a statement of generally accepted theoretical principles which form the frame of reference for financial reporting. These theoretical principles provide the basis for the development of new accounting standards and for the evaluation of those already in existence.
　　. Advantages and disadvantages of a conceptual framework
　　. Generally Accepted Accounting Principles (GAAP)
　　A conceptual framework for financial reporting can be defined as an attempt to codify existing GAAP in order to reappraise current accounting standards and to produce new standards.
　　The IASB’s framework: consists of seven sections
　　- The objective of financial statements
　　- Underlying assumptions
　　- Qualitative characteristics of financial statements
　　- The elements of financial statements
　　- Recognition of the elements of financial statements
　　- Measurement of the elements of financial statements
　　- Concepts of capital and capital maintenance
　　(**)
　　Qualitative characteristics:
　　Fundamental qualitative characteristics are:
　　(a)Relevance: predictive value or confirmatory value
　　(b)Faithful representation: information must be complete, neutral and free from material error (replacing ‘reliability)
　　Enhancing qualitative characteristics are:
　　(a)Comparability: achieved by consistency in use of the same accounting policies
　　(b)Verifiability: credibility, assurance that information faithfully represents the economic phenomena
　　(c)Timeliness: information is provided before it loses the capacity to influence decisions
　　(d)Understandability: for users who have a reasonable knowledge of business and economic activities and who are able to read a financial report; information should not be excluded on the grounds that it may be too complex/difficult for some users to understand. Enhanced when information is classified, characterized and presented clearly and concisely.
　　Revenue recognition
　　Accruals accounting is based on the matching of costs with the revenue they generate.
　　IAS 18 Revenue is concerned with the recognition of revenues arising from fairly common transactions.
　　- The sale of goods
　　- The rendering of services
　　- The use by others of enterprise assets yielding interest, royalties and dividends
　　Generally revenue is recognized when the entity has transferred to the buyer the significant risks and rewards of ownership and when the revenue can be measured reliably.
　　Interest, royalties and dividends are included as income because they arise from the use of an entity’s assets by other parties.
　　Interest is the charge for the use of cash or cash equivalents or amounts due to the entity.
　　Royalties are charges for the use of non-current assets of the entity, e.g. patents, computer software and trademarks.
　　Dividends are distributions of profit to holders of equity investments, in proportion with their holdings, of each relevant class of capital.
　　- Definition：
　　Revenue：is the gross inflow of economic benefits during the period arising in the course of the ordinary activities of an enterprise when those inflows result in increases in equity, other than increases relating to contributions from equity participants.
　　Ie, Revenue does not include sales taxes, value added taxes or goods and service taxes which are only collected for third parties.
　　Fair value: is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.
　　Sale of goods:
　　Ie. Where revenue and expenses cannot be estimated reliably, then revenue cannot be recognized, any consideration which has already been received is treated as a liability.
　　Rendering of services:
　　Revenue is recognized only to the extent of the expenses recognized that are recoverable.
　　If the costs are not likely to be reimbursed, then they must be recognized as an expense.
　　Professional and ethical duty of the accountant
　　1 Ethical theory:
　　A key debate in ethical theory is whether ethics can be determined by objective, universal principles. How important the consequences of actions should be in determining an ethical position is also a significant issue.
　　Ethical relativism and non-cognitivism:
　　.Relativism is the view that a wide variety of acceptable ethical beliefs and practices exist. The ethics that are most appropriate in a given situation will depend on the conditions at that time.
　　Ethical absolutism and cognitivism:
　　Absolutism is the view that there is an unchanging set of ethical principles that will apply to all situations, at all times and in all societies.
　　Deontological ethics:
　　Deontology is concerned with the application of absolute, universal ethical principles in order to arrive at rules of conduct, the word deontology being derived from the Greek for duty.
　　Teleological or consequentialist ethics:
　　There are two versions of consequentialist ethics:
　　Utilitarianism – what is best for the greatest number
　　Egoism – what is best for me
　　The teleological approach to ethics is to make moral judgments about courses of action by reference to their outcomes or consequences.
　　Utilitarianism is the best-known formulation of this approch and can be summed up in the greatest good principle – greatest happiness of the greatest number.
　　Teleological or consequentialist ethics: egoism
　　Egoism states that an act is ethically justified if decision-makers freely decide to pursue their own short-term desires or their long-term interests. The subject to all ethical decisions is the self.
　　2 Influences on ethics:
　　ethical decision making is influenced by individual and situational factors.
　　Individual factors include age and gender, beliefs, education and employment, how much control individuals believe they have over their own situation and their personal integrity.
　　Kohlberg’s framework relates to individuals’ degree of ethical maturity, the extent to which they can take their own ethical decisions.
　　Situational factors include the systems of reward, authority and bureaucracy, work roles, organizational factors, and the national and cultural contexts.
　　Kohlberg’s cognitive moral development:
　　LevelⅠ pre-conventional (rewards/punishment/self-interest)
　　LevelⅡ conventional
　　LevelⅢ post-conventional
　　Bureaucracy: is a system characterized by detailed rules and procedures, impersonal hierarchical relations and a fixed division of tasks.
　　3.The social and ethical environment
　　Firms have to ensure they obey the law: but they also face ethical
　　concerns, because their reputations depend on a good image.
　　Ethics: a set of moral principles to guide behaviour
　　Ethical problems facing managers
　　Social responsibility and businesses
 
　　4.Ethics in organizations
　　Leadership practices and ethics
　　Two approaches to managing ethics:
　　A compliance-based approach is primarily designed to ensure that the company acts within the letter of the law, and that violations are prevented, detected and punished.
　　An integrity-based approach combines a concern for the law with an emphasis on managerial responsibility for ethical behavior.
　　5.Principles and guidance on professional ethics
　　A distinguishing mark of the accountancy profession is its acceptance of the responsibility to act in the public interest.
　　The fundamental principles
　　Integrity – straightforward and honest
　　Objectivity – should not allow bias, conflict of interest or undue influence of others
　　Professional competence and due care – members have a continuing duty to maintain professional knowledge and skill at a level required to ensure that a client or employer receives the advantage of competent professional service based on current developments in practice.
　　
　　　　　　
　　扫一扫微信，*9时间获取2014年ACCA考试报名时间和考试时间提醒
　　
　　高顿网校特别提醒：已经报名2014年ACCA考试的考生可按照复习计划有效进行！另外，高顿网校2014年ACCA考试辅导高清课程已经开通，通过针对性地讲解、训练、答疑、模考，对学习过程进行全程跟踪、分析、指导，可以帮助考生全面提升备考效果。
　　
　　报考指南：2014年ACCA考试备考指南
　　免费题库：2014年ACCA考试免费题库
　　考前冲刺：ACCA备考秘籍
　　高清网课：ACCA考试网络课程　　
展开全文