ASSOCIATION OF CHARTERED

CERTIFIED ACCOUNTANTS
F3 FINANCIAL ACCOUNTING
1st Meeting

Introduction to Accounting and

The Regulatory Framework

Learning Objective
a.
b.
c.
d.
e.
f.
g.
h.

Define financial reporting recording, analysing and

summarising financial data.
Identify and define types of business entity sole trader,
partnership, limited liability company.
Recognise the legal differences between a sole trader,
partnership and a limited liability company.
Identify the advantages and disadvantages of operating as a
limited liability company, sole trader or partnership.
Understand the nature, principles and scope of financial
reporting.
Identify the users of financial statements and state and
differentiate between their information needs.
Understand and identify the purpose of each of the main
financial statements.
Define and identify assets, liabilities, equity, revenue and
expenses.

ACCA Paper F3 Batch V

Learning Objective
i.
j.
k.

l.

Explain what is meant by governance specifically in the context

of the preparation of financial statements.
Describe the duties and responsibilities of directors and other
parties covering the preparation of the financial statements.
Understand the role of the regulatory system including the roles
of the IFRS Foundation (IFRSF), the International Accounting
Standards Board (IASB), the IFRS Advisory Council (IFRS AC)
and the IFRS Interpretations Committee (IFRS IC).
Understand the role of the International Financial Reporting
Standards.

ACCA Paper F3 Batch V

INTRODUCTION TO
ACCOUNTING

The Purpose of
Financial Reporting

What is Financial Reporting?

Financial reporting is a way of recording,
analysing and summarising financial data.
Financial data is the name given to the actual
transactions carried out by a business eg sales of
goods, purchases of goods, payment of expenses.
These transactions are recorded in books of
prime entry.
The transactions are analysed in the books of
prime entry and the totals are posted to the ledger
accounts.
Finally, the transactions are summarised in the
financial statements.
ACCA Paper F3 Batch V

INTRODUCTION TO
ACCOUNTING

Types of Business Entity

What is a Business?
Businesses of whatever size or nature exist to make a
profit. There are a number of different ways of looking
at a business. Some ideas are listed below:
A business is a commercial or industrial concern
which exists to deal in the manufacture, re-sale or
supply of goods and services.
A business is an organisation which uses
economic resources to create goods or services
which customers will buy.
A business is an organisation providing jobs for
people.
A business invests money in resources (for
example: buildings, machinery, employees) in order
to make even more money for its owners.
ACCA Paper F3 Batch V

Types of Business Entity

Sole traders. A sole tradership is a business owned and run
by one individual, perhaps employing one or two assistants
and controlling their work. The individual's business and
personal affairs are, for legal and tax purposes, identical.
Limited liability companies. Limited liability status means
that the business's debts and the personal debts of the
business's owners (shareholders) are legally separate. The
shareholders cannot be sued for the debts of the business
unless they have given some personal guarantee. This is called
limited liability.
Partnerships are arrangements between individuals to carry
on business in common with a view to profit. A partnership,
however, involves obligations to others, and so a partnership is
usually governed by a partnership agreement. Unless it is a
limited liability partnership (LLP), partners will be fully liable
for debts and liabilities, for example if the partnership is sued.
ACCA Paper F3 Batch V

Types of Business Entity

In law sole traders and partnerships are not
separate entities from their owners. However, a
limited liability company is legally a separate
entity from its owners. Contracts can therefore be
issued in the companys name.
For accounting purposes, all three entities are
treated as separate from their owners. This is
called the business entity concept.

ACCA Paper F3 Batch V

Sole Traders
This type of structure is ideal if the business is not
complicated, and especially if it does not require a
great deal of outside capital.
Advantages include:
Limited paperwork and therefore cost in
establishing this type of structure.
Owner has complete control over the business.
Owner is entitled to profits and the ownership
of assets.
Less stringent reporting obligations compared
with other business structures-no requirement to
make financial accounts publicly available, no audit
requirement.
Can be highly flexible.
ACCA Paper F3 Batch V

10

Sole Traders
Disadvantages of being a sole trader:
Owner is personally liable for all debts
(unlimited liability).
Personal property may be vulnerable for debts
and other business liabilities.
Large sums of capital are less likely to be
available to a sole trader, leading to reliance on
overdrafts and personal savings.
May lead to long working hours without the
normal employee recreation leave and other
benefits.
May be issues of continuity of business in the
event of death or illness of the owner.
ACCA Paper F3 Batch V

11

Partnerships
Advantages of partnerships
Less stringent reporting obligations no
requirement to make financial accounts publicly
available, no audit requirement, unless the
partnership has LLP status.
Additional capital can be raised because more
people are investing in the business.
Division of roles and responsibilities and an
increased skill set.
Sharing of risk and losses between more
people.
No company tax on the business (profits are
distributed to partners and then subject to
personal tax).
ACCA Paper F3 Batch V

12

Partnerships
Disadvantages of partnerships
Partners are jointly personally liable for all debts
(unlimited liability) unless they have formed a
limited liability partnership.
There are costs associated with setting up
partnership agreements.
There may be issues of continuity of business in
the event of death or illness of the partners.
Slower decision making due to the need for
consensus between partners.
Unless a clause is written into the original agreement,
when one partner leaves, the partnership is
automatically dissolved and another agreement is
required between existing partners.
ACCA Paper F3 Batch V

13

Limited Liability Companies

Limited liability companies are incorporated to take
advantage of 'limited liability for their owners
(shareholders).
The shareholders of a limited liability company are only
responsible for the amount paid for their shares.
They are not responsible for the company's debts unless
they have given personal guarantees (of a bank loan, for
example). However, they may lose the money they have
invested in the company if it fails.
Shareholders may be individuals or other companies.
Limited liability companies are formed under specific
legislation (eg in the UK, the Companies Act 2006). A
limited liability company is legally a separate entity
from its owners, and can confer various rights and
duties.
ACCA Paper F3 Batch V

14

Limited Liability Companies

There is a clear distinction between shareholders
and directors of limited companies:
Shareholders are the owners, but have limited
rights, as shareholders, over the day-to-day
running of the company. They provide capital and
receive a return (dividend).
The Board of Directors are appointed to run the
company on behalf of shareholders. In practice,
they have a great deal of autonomy. Directors are
often shareholders.

ACCA Paper F3 Batch V

15

Limited Liability Companies

The reporting requirements for limited liability
companies are much more stringent than for sole
traders or partnerships. In the UK, there is a legal
requirement for a company to:

Be registered at Companies House.

Complete a Memorandum of Association and Articles of
Association to be deposited with the Registrar of
Companies.
Have at least one director (two for a public limited
company (PLC)) who may also be a shareholder.
Prepare financial accounts for submission to Companies
House.
Have their financial accounts audited (larger companies
only).
Distribute the financial accounts to all shareholders.
ACCA Paper F3 Batch V

16

Limited Liability Companies

Advantages of trading as a limited liability company:

Limited liability makes investment less risky than being a sole

trader or investing in a partnership. However, lenders to a small
company may ask for a shareholder's personal guarantee to
secure any loans.
Limited liability makes raising finance easier (eg through the
sale of shares) and there is no limit on the number of
shareholders.
A limited liability company has a separate legal identity from
its shareholders. So a company continues to exist regardless of
the identity of its owners.
There are tax advantages to being a limited liability company.
The company is taxed as a separate entity from its owners and
the tax rate on companies may be lower than the tax rate for
individuals.
It is relatively easy to transfer shares from one owner to
another. In contrast, it may be difficult to find someone to buy a
sole trader's business or to buy a share in a partnership.

ACCA Paper F3 Batch V

17

Limited Liability Companies

Disadvantages of trading as a limited liability company:

Limited liability companies have to publish annual financial

statements. This means that anyone (including competitors) can
see how well (or badly) they are doing. In contrast, sole traders
and partnerships do not have to publish their financial statements.
Limited liability company financial statements have to comply with
legal and accounting requirements. In particular, the financial
statements have to comply with accounting standards. Sole traders
and partnerships may comply with accounting standards, eg for tax
purposes.
The financial statements of larger limited liability companies have
to be audited. This means that the statements are subject to an
independent review to ensure that they comply with legal
requirements and accounting standards. This can be inconvenient,
time consuming and expensive.
Share issues are regulated by law. For example, it is difficult to
reduce share capital. Sole traders and partnerships can increase or
decrease capital as and when the owners wish.
18
ACCA Paper F3 Batch V

INTRODUCTION TO
ACCOUNTING

Nature, Principles and

Scope of Financial Reporting

Financial Accounting
Financial accounting is mainly a method of
reporting the financial performance and
financial position of a business.
It is not primarily concerned with providing
information towards the more efficient running
of the business.
Although financial accounts are of interest to
management, their principal function is to satisfy
the information needs of persons not involved
in running the business.
They provide historical information.

ACCA Paper F3 Batch V

20

Management Accounting
The information needs of management go far
beyond those of other account users.
Managers have the responsibility of planning
and controlling the resources of the business.
Therefore they need much more detailed
information. They also need to plan for the
future (eg budgets, which predict future revenue
and expenditure).
Management (or cost) accounting is a
management information system which analyses
data to provide information as a basis for
managerial action. The concern of a management
accountant is to present accounting information in
the form most helpful to management.
ACCA Paper F3 Batch V

21

INTRODUCTION TO
ACCOUNTING

Users and
Stakeholders needs

The Need of Financial Statements

The International Accounting Standards Board (IASB)
states in its document Conceptual framework for
financial reporting:
'The objective of financial statements is to provide
information
about
the
financial
position,
performance and changes in financial position of an
entity that is useful to a wide range of users in making
economic decisions.
In other words, a business should produce information
about its activities because there are various groups of
people who want, or need, to know that information.
Large businesses are of interest to a greater variety of
people and so we will consider the case of a large public
company, whose shares can be purchased and sold on a
stock exchange.
ACCA Paper F3 Batch V

23

Users of Financial Statements and

Accounting Information
Managers of the company are appointed by the company's
owners to supervise the day-to-day activities of the company.
They need information about the company's financial situation
as it is currently and as it is expected to be in the future. This
is to enable them to manage the business efficiently and to
make effective decisions.
Shareholders of the company, ie the company's owners,
want to assess how well its management is performing. They
want to know how profitable the company's operations are
and how much profit they can afford to withdraw from the
business for their own use.
Trade contacts include suppliers who provide goods to the
company on credit and customers who purchase the goods or
services provided by the company. Suppliers want to know
about the company's ability to pay its debts; customers need
to know that the company is a secure source of supply and is
in no danger of having to close down.

ACCA Paper F3 Batch V

24

Users of Financial Statements and

Accounting Information
Providers of finance to the company might include a bank
which allows the company to operate an overdraft, or provides
longer-term finance by granting a loan. The bank wants to
ensure that the company is able to keep up interest
payments, and eventually to repay the amounts advanced.
The taxation authorities want to know about business
profits in order to assess the tax payable by the company,
including sales taxes.
Employees of the company should have a right to
information about the company's financial situation, because
their future careers and the size of their wages and salaries
depend on it.

ACCA Paper F3 Batch V

25

Users of Financial Statements and

Accounting Information
Financial analysts and advisers need information for their
clients or audience. For example, stockbrokers need
information to advise investors. Credit agencies want
information to advise potential suppliers of goods to the
company. Journalists need information for their reading public.
Government and their agencies are interested in the
allocation of resources and therefore in the activities of
business entities. They also require information in order to
provide a basis for national statistics.
The public. Entities affect members of the public in a variety
of ways. For example, they may make a substantial
contribution to a local economy by providing employment and
using local suppliers. Another important factor is the effect of
an entity on the environment, for example as regards
pollution.
ACCA Paper F3 Batch V

26

Needs of Different Users

Managers of a business need the most information, to
help them make their planning and control decisions.
They obviously have 'special' access to information
about the business, because they are able to demand
whatever internally produced statements they require.
When managers want a large amount of information
about the costs and profitability of individual products,
or different parts of their business, they can obtain it
through a system of cost and management
accounting.
Accounting information is summarised in financial
statements to satisfy the information needs of these
different groups. Not all will be equally satisfied.
ACCA Paper F3 Batch V

27

INTRODUCTION TO
ACCOUNTING

Governance

Corporate Governance
Corporate governance is the system by which
companies and other entities are directed and
controlled.
Good corporate governance is important
because the owners of a company and the people
who manage the company are not always the
same, which can lead to conflicts of interest.
The board of directors of a company are usually
the top management and are those who are
charged with governance of that company. The
responsibilities and duties of directors are usually
laid down in law and are wide ranging.
ACCA Paper F3 Batch V

29

Legal Responsibilities of Directors

Directors have a duty of care to show reasonable
competence and may have to indemnify the company
against loss caused by their negligence. Directors are also
said to be in a fiduciary position in relation to the
company which means that they must act honestly in what
they consider to be the best interest of the company and in
good faith.
An overriding theme of the Companies Act 2006 is the
principle that the purpose of the legal framework
surrounding companies should be to help companies do
business. A directors main aim should be to create
wealth for the shareholders.
In essence, this principle means that the law should
encourage long-termism and regard for all stakeholders
by directors and that stakeholder interests should be
pursued in an enlightened and inclusive way.
ACCA Paper F3 Batch V

30

Legal Responsibilities of Directors

In the UK, the Companies Act 2006 sets out seven
statutory duties of directors. Directors should:
Act within their powers
Promote the success of the company
Exercise independent judgement
Exercise reasonable skill, care and diligence
Avoid conflicts of interest
Not accept benefits from third parties
Declare an interest in a proposed transaction or
arrangement

ACCA Paper F3 Batch V

31

Legal Responsibilities of Directors

When exercising this duty directors should consider:
The consequences of decisions in the long term
The interests of their employees
The need to develop good relationships with customers
and suppliers
The impact of the company on the local community and
the environment
The desirability of maintaining high standards of business
conduct and a good reputation
The need to act fairly as between all members of the
company
This list identifies areas of particular importance and modern
day expectations of responsible business behaviour, for
example the interests of the company's employees and the
impact of the company's operations on the community and the
environment.
ACCA Paper F3 Batch V

32

Responsibility of Financial Statements

Directors are responsible for the preparation of the
financial statements of the company. Specifically, directors
are responsible for:
The preparation of the financial statements of the
company in accordance with the applicable financial
reporting framework (eg IFRSs)
The internal controls necessary to enable the
preparation of financial statements that are free from
material misstatement, whether due to error or fraud
The prevention and detection of fraud
It is the directors responsibility to ensure that the entity
complies with the relevant laws and regulations.
Directors should explain their responsibility for preparing
accounts in the financial statements. They should also report
that the business is a going concern, with supporting
assumptions and qualifications as necessary.
ACCA Paper F3 Batch V

33

Responsibility of Financial Statements

Directors should present a balanced and understandable
assessment of the company's position and prospects in the
annual accounts and other reports, such as interim reports and
reports to regulators.
The directors should also explain the basis on which the company
generates or preserves value and the strategy for delivering
the companys longer-term objectives.
Companies over a certain size limit are subjected to an annual audit
of their financial statements. An audit is an independent examination
of the accounts to ensure that they comply with legal requirements
and accounting standards. Note that the auditors are not responsible
for preparing the financial statements.
The findings of an audit are reported to the shareholders of the
company. An audit gives the shareholders assurance that the
accounts, which are the responsibility of the directors, present fairly
the financial performance and position of the company. An audit
therefore goes some way in helping the shareholders assess how well
management have carried out their responsibility for stewardship of
the companys assets.
34
ACCA Paper F3 Batch V

INTRODUCTION TO
ACCOUNTING

The Main Elements of

Financial Reports

Statement of Financial Position:

Assets
An asset is something valuable which a business owns or can
use. The IASBs Conceptual framework for financial reporting
defines an asset as follows:
An asset is a resource controlled by an entity as a result of
past events and from which future economic benefits are
expected to flow to the entity.
Some assets are held and used in operations for a long time.
An office building is occupied by administrative staff for years.
Similarly, a machine has a productive life of many years
before it wears out.
Other assets are held for only a short time. The owner of a
newsagent shop, for example, has to sell his newspapers on
the same day that he gets them. The more quickly a business
can sell the goods it has in store, the more profit it is likely to
make; provided, of course, that the goods are sold at a higher
price than what it cost the business to acquire them.
ACCA Paper F3 Batch V

36

Statement of Financial Position:

Liabilities
A liability is something which is owed to somebody
else. 'Liabilities' is the accounting term for the debts of a
business. The IASBs Conceptual framework for financial
reporting defines a liability as follows:
A liability is a present obligation of the entity arising
from past events, the settlement of which is expected
to result in an outflow from the entity of resources
embodying economic benefits.
Examples of liabilities are amounts owed to a supplier
for goods bought on credit, amounts owed to a bank (or
other lender), a bank overdraft and amounts owed to
tax authorities (eg in respect of sales tax).
Some liabilities are due to be repaid fairly quickly eg
suppliers. Other liabilities may take some years to repay
(eg a bank loan).
ACCA Paper F3 Batch V

37

Statement of Financial Position:

Capital or Equity
The amounts invested in a business by the owner
are amounts that the business owes to the owner.
This is a special kind of liability, called capital. In a
limited liability company, capital usually takes form
of shares. Share capital is also known as equity.
The IASBs Conceptual framework for financial
reporting defines equity as follows:
Equity is the residual interest in the assets of the
entity after deducting all its liabilities.

ACCA Paper F3 Batch V

38

Form of Statement of
Financial Position

ACCA Paper F3 Batch V

39

Statement of Profit or Loss

A statement of profit or loss is a record of income generated
and expenditure incurred over a given period. The statement
shows whether the business has had more revenue than
expenditure (a profit) or vice versa (loss).
Revenue is the income generated by the business for a period.
Expenses are the costs of running the business for the same
period.
The IASBs Conceptual framework defines income and expenses
as follows.
Income is increases in economic benefits during the accounting
period in the form of inflows or enhancements of assets or
decreases of liabilities that result in increases in equity, other
than those relating to contributions from equity participants.
Expenses are decreases in economic benefits during the
accounting period in the form of outflows or depletions of assets
or incurrences of liabilities that result in decreases in equity,
other than those relating to distributions to equity participants.

ACCA Paper F3 Batch V

40

Form of Statement of Profit or Loss

The period chosen will depend on the purpose for which the
statement is produced. The statement of profit or loss which forms
part of the published annual financial statements of a limited
liability company will usually be for the period of a year,
commencing from the date of the previous year's statements. On the
other hand, management might want to keep a closer eye on a
company's profitability by making up quarterly or monthly
statements.

ACCA Paper F3 Batch V

41

Purpose of Financial Statements

Both the statement of financial position and the statement of
profit or loss are summaries of accumulated data. For
example, the statement of profit or loss shows a figure for
revenue earned from selling goods to customers. This is the total
amount of revenue earned from all the individual sales made
during the period. One of the jobs of an accountant is to devise
methods of recording such individual transactions, so as to
produce summarised financial statements from them.
The statement of financial position and the statement of profit or
loss form the basis of the financial statements of most
businesses. For limited liability companies, other information by
way of statements and notes may be required by national
legislation and/or accounting standards, for example a
statement of profit or loss and other comprehensive
income and a statement of cash flows.
ACCA Paper F3 Batch V

42

THE REGULATORY
FRAMEWORK

The Regulatory System

Learning Objective
a.

b.

Understand the role of the regulatory system

including the roles of the IFRS Foundation
(IFRSF), the International Accounting Standards
Board (IASB), the IFRS Advisory Council (IFRS
AC) and the IFRS Interpretations Committee
(IFRS IC).
Understand the role of the International
Financial Reporting Standards.

ACCA Paper F3 Batch V

44

Introduction
The following factors that have shaped financial
accounting can be identified:
National/local legislation
Accounting concepts and individual judgement
Accounting standards
Other international influences
Generally accepted accounting principles (GAAP)
Fair presentation
In most countries, limited liability companies are
required by law to prepare and publish accounts
annually. The form and content of the accounts is
regulated primarily by national legislation.
ACCA Paper F3 Batch V

45

Accounting Concepts and

Individual Judgement
Many figures in financial statements are derived from
the application of judgement in applying
fundamental
accounting
assumptions
and
conventions. This can lead to subjectivity. Accounting
standards were developed to try to address this
subjectivity.
Financial statements are prepared on the basis of a
number of fundamental accounting assumptions
and conventions. Many figures in financial
statements are derived from the application of
judgement in putting these assumptions into practice.
It is clear that different people exercising their
judgement on the same facts can arrive at very
different conclusions.
ACCA Paper F3 Batch V

46

Accounting Standards
In an attempt to deal with some of the
subjectivity, and to achieve comparability between
different organisations, accounting standards
were developed. These are developed at both a
national level (in most countries) and an
international level.
The
FFA/F3
syllabus
is
concerned
with
International Financial Reporting Standards
(IFRSs).
International Financial Reporting Standards are
produced by the International Accounting
Standards Board (IASB).
ACCA Paper F3 Batch V

47

THE REGULATORY
FRAMEWORK

The International Accounting

Standards Board (IASB)

IASB
The IASB develops International Financial Reporting Standards
(IFRSs). The main objectives of the IFRS Foundation are to
raise the standard of financial reporting and eventually bring
about global harmonisation of accounting standards.
The International Accounting Standards Board (IASB) is an
independent, privately-funded body that develops and
approves IFRSs.
Prior to 2003, standards were issued as International
Accounting Standards (IASs). In 2003 IFRS 1 was issued and
all new standards are now designated as IFRSs.
The members of the IASB come from nine countries and have
a variety of backgrounds with a mix of auditors, preparers of
financial statements, users of financial statements and
academics.
The IASB operates under the oversight of the IFRS
Foundation.
ACCA Paper F3 Batch V

49

Structure of the IFRS Foundation

ACCA Paper F3 Batch V

50

The IFRS Foundation

The IFRS Foundation (formally called the International Accounting

Standards Committee Foundation or IASCF) is a not-for-profit,
private sector body that oversees the IASB.
The objectives of the IFRS Foundation are to:

Develop a single set of high quality, understandable, enforceable

and globally accepted International Financial Reporting Standards
(IFRSs) through its standard-setting body, the IASB
Promote the use and rigorous application of those standards
Take account of the financial reporting needs of emerging
economies and small and medium-sized entities (SMEs)
Bring about convergence of national accounting standards and
IFRSs to high quality solutions.

The IFRS Foundation is currently made up of 22 Trustees, who

essentially monitor and fund the IASB, the IFRS Advisory
Council and the IFRS Interpretations Committee. The
Trustees are appointed from a variety of geographic and
functional backgrounds.

ACCA Paper F3 Batch V

51

The IFRS Foundation:

IFRS Advisory Council
The IFRS Advisory Council (formerly called the
Standards Advisory Council or SAC) is essentially a
forum used by the IASB to consult with the
outside world.
It consults with national standard setters, academics,
user groups and a host of other interested parties to
advise the IASB on a range of issues, from the IASBs
work programme for developing new IFRSs, to giving
practical advice on the implementation of
particular standards.
The IFRS Advisory Council meets the IASB at least
three times a year and puts forward the views of its
members on current standard-setting projects.
ACCA Paper F3 Batch V

52

The IFRS Foundation:

IFRS Interpretations Committee
The IFRS Interpretations Committee (formerly called the
International Financial Reporting Interpretations Committee or
IFRIC) was set up in March 2002 and provides guidance on
specific practical issues in the interpretation of IFRSs.
Note that despite the name change, interpretations issued by
the IFRS Interpretations Committee are still known as IFRIC
Interpretations. In your exam, you may see the IFRS
Interpretations Committee referred to as the IFRS IC.
The IFRS Interpretations Committee has two main
responsibilities:
To review, on a timely basis, newly identified financial
reporting issues not specifically addressed in IFRSs
To clarify issues where unsatisfactory or conflicting
interpretations have developed, or seem likely to
develop in the absence of authoritative guidance, with a
view to reaching a consensus on the appropriate
treatment.
ACCA Paper F3 Batch V

53

THE REGULATORY
FRAMEWORK

International Financial
Reporting Standards (IFRSs)

The Use and Application of IFRSs

IFRSs have helped to both improve and harmonise
financial reporting around the world. The standards
are used in the following ways:
As national requirements.
As the basis for all or some national
requirements.
As an international benchmark for those countries
which develop their own requirements.
By regulatory authorities for domestic and
foreign companies.
By companies themselves.
In the UK the consolidated accounts of listed companies have had
to be produced in accordance with IFRSs since January 2005.
ACCA Paper F3 Batch V

55

Standard Setting Process

ACCA Paper F3 Batch V

56

Current IFRSs
The current list is as follows:
(Those examinable in FFA/F3 are marked with a *)

ACCA Paper F3 Batch V

57

Scope and Application of IFRSs

Scope

Any limitation of the applicability of a specific IFRS is made

clear within that standard. IFRSs are not intended to be
applied to immaterial items, nor are they retrospective.
Each individual standard lays out its scope at the beginning of
the standard.

Application

Within each individual country local regulations govern, to a

greater or lesser degree, the issue of financial statements.
These local regulations include accounting standards issued
by the national regulatory bodies and/or professional
accountancy bodies in the country concerned.

ACCA Paper F3 Batch V

58

THE END