FINANCIAL ACCOUNTING 2 Essay Example | Topics and Well Written Essays - 1250 words

FINANCIAL ACCOUNTING 2 - Essay Example Capital market players include, fund managers, commercial banks and investment banks etc. [4, Stella Fernley, Richard Brant and Vivien Beattie, 10 May, 2002] Answer no. 1: The Companies Act, 1989 brought in many significant changes in the regulatory framework in the United Kingdom with respect to financial reporting and auditing. In the year 1991, a new auditors’ regulatory system was also introduced according to which it is necessary for the auditors to hold a recognized qualification along with relevant experience proof. [1, Beattie and Fernley, 1994] Additionally, the work quality of the auditing firms also would be monitored frequently and the failure to meet the prescribed quality would lead to penalties and also may result in the license cancellation of the individuals or firms. [2, Beattie and Fernley, 1998] The dual roles of the professional bodies also lead to another change i.e. the setting up of ‘The Accountancy Foundation.’ The purpose of the setting up of The Accountancy Foundation is the independent supervision of both the regulatory standards and ethical standards of the accounting profession. Apart from this the foundation also sets auditing standards and also investigates public interest cases if accountants are involved in the case. [4, Stella Fernley, Richard Brant and Vivien Beattie, 10 May, 2002] Usually, a number of fundamental concepts of accounting are taken into consideration while preparing the financial statements of the company. Generally, it so happens that the figures in the financial statements vary from one statement to the other. This is because people who prepare those statements arrive at those stated figures based on their judgment in practical. This fact can be understood by considering the following examples: (b) (b) Others would say that this does not go far enough. If property prices are rising, not only should no depreciation be