Analysis Of The Companies Act 2006

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The Government also got heavily involved and in this period and managed to pass 7 companies acts in a relatively short period of time. Although it was almost two decades before another Companies Act got passed. This act was the Companies Act 2006, which plays a large role in the UKs accounting activities today. According to the Companies Act 2006, accounting standards are: ‘…statements of standard accounting practice issued by such body as may be prescribed by regulations. (Companies Act, 2006) In accordance with the Companies Act 2006 ‘There are no specific legal or statutory requirements dealing with the sole trader and partnership accounts in the Companies Act or elsewhere.’ (Dyson, 2010). This essentially means that the owners of…show more content…
However, non-publically traded companies in the UK can choose between the UK Accounting Standards and the Companies Act 2006; or just the IAS on its own. Another piece of legislation is the Sarbanes Oxley Act (SOX). The purpose of this act is to protect investors from fraudulent accounting activities by corporations (Investopedia, 2017). In response to the poor financial practices of the 60s, The Institute of Chartered Accountants in England and Wales (ICAEW) founded the Accounting Standards Steering Committee (ASSC) in 1970. Later that decade, it was renamed the Accounting Standards Committee (ASC). The ASC went on for another 14 years before it was replaced by the Accounting Standards Board (ASB). The main purpose of the ASB is to develop and issue accounting standards and principles; to address urgent accounting issues and to work in unison with other accounting institutions. The ASB operates under the Financial Reporting Council (FRC) which is a private limited company, and the standards issued by the ASB are called Financial Reporting Standards (FRSs). In the early 70s, the International Accounting Standards Committee (IASC) was born. The priority of the IASC was to improve comparability of financial statements on an international level. It then changed its name to the International Accounting Standards Board (IASB). The main aim of the IASB is not too dissimilar from the IASC ‘... to develop a single set of high quality,
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