Analysis Of The Companies Act 2006

On this assignment you are going to find why it is so important to have accounting standards to do business around the world, and it is important because if we have accounting standards it will be easy for companies to do business in other countries, and can be more reliable on the numbers, because it will be the same ones for all companies, and that would help to identify frauds, and have an accurate books. Also will help investors to invest their money without worrying of acts of fraud, and for that reason I would talk about the Sarbanes Oxley Act, which was created to protect investors from corporate accounting fraud, many people say that the Sarbanes Oxley Act SOX was implemented in response to the Enron scandal. The official name of the

After major corporate and accounting scandals like those that affected Tyco, Worldcom and Enron the Federal government passed a law known as the Sarbanes-Oxley Act of 2002 also known as the Public Company Accounting Reform and Investor Protection Act. This law was passed in hopes of thwarting illegal and misleading acts by financial reporters and putting a stop to the decline of public trust in accounting and reporting practices. Two important topics covered in Sarbanes-Oxley are auditor independence and the reporting and assessment of internal controls under section 404.

The International Accounting Standards Board (IASB) was formed in an attempt to bring uniform accounting standards within international countries through its issuing of the International Financial Reporting Standards (IFRS). Today, over 100 countries including Canada, India, and Japan have adopted these standards for financial reporting. The growth of multinational companies such as Coca Cola and the increasing desire of cross-border investing have made it apparent that the U.S.accounting standards known as the Generally Accepted Accounting Principles (GAAP) issued by the Financial Accounting Standards Board (FASB) can no longer remain separate from IFRS. Under the request of the Securities and

Financial Reporting Council: The Use of a Sector Neutral Framework for the Making of Australian Accounting Standards

In contrast the US structure is a fragment more complex than that of the UK. To understand accounting standard setting in the US, one must start with the SEC (Securities and Exchange Commission) which is a regulatory agency established in 1934 by the congress. Previous to this no national system existed to govern the data flow of communication to investors. SEC has been given the statutory power to promulgate accounting principles. Even though it consists of its own policy, it does rely on the private sector in the US to establish financial reporting standards. Its role of standard setting on financial reporting and accountancy principle guidelines is backed with its powerful influence. Another standard setting board is the FSAB with its role to expand accounting standards outside the profession by encouraging. As a result the main source for accounting standards in the US internally is GAAP (Generally Accepted Accounting Principles) which is mounded by authority's pronouncement by the FASB (Financial Accounting Standards Board). The role of the FSAB is to set up financial accounting and reporting standards in the US. The FSAB structure is very significant around the world today as the "IASC's framework and UK statement of principles are clearly

The Sarbanes–Oxley Act which is also popularly known as the public company accounting reforms is considered as one of the landmark acts if one talks about the way the internal controls are talked about. What this act has done is that it has set pretty much the new and much more controlled requirements as far as the management of the public limited companies is concerned and how they are supposed to take care of their management and overall business conduct (Hostak et al, 2013). At the same time, the interesting thing about the fact is that there are some provisions of the act that also apply to the public accounting firms (Hostak et al, 2013).

Up until 1990 standards were set by the ASC; a body made up of six professional accounting bodies in the UK. By 1991 the ASC had produced twenty-five standards, however they were still criticised for what they did. Criticisms included the absence of a conceptual framework; the adoption of a fire fighting approach to dealing with accounting

From 1973 to 2000 International Accounting Standard Panel (Iasc) was the body whereupon the obligation was situated to issue International Accounting Standards. In 2001 IASC was supplanted by International Accounting Models Board (IASB). Since then international Accounting Models Board (IASB), based at London - UK is presently capable to issue International Financial Reporting Models (Ifrs) and international Accounting Standards (Ias). iasb is free body and comprises of parts from nine separate nations around the globe having mixed bag of useful foundations. In India the institute of Chartered Bookkeepers of India (Icai) has formed accounting Models Board (Asb) in 1977, whereupon the obligation was situated to create bookkeeping models to be issued furthermore overhauled in the nation occasionally. Though

Currently, firms that perform audits under the Companies Act 1993 and the Securities Act 1978 are not permitted to be a ‘body corporate’. Sole auditors enforce the partnership model which results in a number of limitations that are placed on auditors. The Accounting Infrastructure Reform Bill includes proposals to change this rule and allow members of accredited professional bodies to perform statutory audits. The Reform Bill is also proposing other methods for auditors to limit liability.

As an old dictum, “accounting is a language of business”. Each and every country had their own accounting standards. But after globalization, businesses around the world felt embarrassing having their own language. So the officials around the world decided that they need to talk in a common language and came up with a committee called IASC. IASC was formed in the year 1973. This board consisted of 22 member and was divided as 6-North America, 6-Europe, 6-Asia and 4-other region to ensure mutual opinion. The financial statements that are being developed from an accounting standard should be of high quality, transparent and comparable information. IASC was very keen on these factors and was keep on working on the development of their

Global accounting standard setter joined hands to work in a coordinated manner to achieve the goal of creation of single set of accounting standards. Thus, IASB and FASB in response to the issues arisen due to the financial crisis started development of new set of standards. They decided to replace IAS 39 by and built and sub divided the project into three phases:

Furthermore in May 2000, the IASC ratified a new constitution and restructuring plan to address some of the issues that had detracted from their credibility since its inception, including its part-time staff (Zeff, 2012). These events culminated the ownership of the IASC by the accounting profession worldwide (Zeff, 2012). Similar surrenders by national groups of accounting professions had occurred previously in the U.S. in 1973 when the APB turned standard setting over to the FASB and in the U.K. in 1990 when the Accounting Standards Board succeeded to the Accounting Standards Committee (Zeff, 2012). In April 2001, the first official meeting of the International Accounting Standards Board

The 1970s saw the creation of the first international accounting standard committee and began to see voluntary cooperation between FASB and other international accounting governing bodies. Following an agreement by the AICPA and eight other international counterparts, the IASC was founded in London on June 29, 1973. The Board of the IASC was comprised of nine delegations of three members each that would attend three Committee meetings. The purpose of the IASC at its

Over the twentieth century, with the rapid development of companies in which have became the dominant force in UK’ economy. Thus, Act of 1948 was insufficient to address the raised problems about accountancy. In 1948 enacted another featuring Act, companies are forced to prepare the balance sheet and profit and loss account. The company Act 1977 is the 1948 extended legislation that gave shareholders more power to involve in the company;s affairs, especially, the director could be removed by the shareholders with a simple majority vote.

In 1960s there were a number of serious cases against many big companies where lack of uniformed accounting standards led to public demanding a set of uniformed rules which would prevent similar abuse. In response to these scandals UK accounting organizations created a new body called Accounting Standards Committee with the main task of unifying and standardizing accounting statements. The ASC had managed to publish a set of standards called Statements of Standard Accounting Practices. The ASC had been replaced by the other body in 1990 which was called Financial Reporting Standards Committee or FRS. It was compulsory for companies to follow instructions given by FSC. (Wood, Sangster 2012)