An Assignment

On

Advanced Accounting

Written By

Bassey Irene Agala

18/BA/AC/1911
Department of Accounting
Faculty of Business Administration

Submitted to

The lecturer-in-Charge
Dr. Mrs Adebimpe Umoren
Course Code: ACC 412
Course Title: Advanced Accounting
Department of Accounting
Faculty of Business Administration
University of Uyo, Uyo.

January, 2023
Question 1
The Importance of regulatory framework for accounting.
Answer 1
The need for regulation
The objective of financial statements is to provide information about the financial position,
financial performance and cash flows of an entity that is useful to a wide range of users in
making economic decisions. There are several reasons why financial reporting should be
regulated. The most obvious one is that without it, an entity would be free to adopt any
accounting treatment that it chose.
Other reasons are as follows:
 People external to businesses are normally dependent on the published financial
statements for information about an entity’s activities. Regulation ensures that external
users of financial statements are provided with information that is relevant to their
decisions and reliable.
 Accounting standards and other forms of regulation help to ensure that entities adopt
similar accounting treatments for similar items and account for similar transactions in the
same way. This makes it possible to compare the financial statements of different entities
and to compare an entity’s performance for the current year with its performance in
previous years.
 Without regulation, management would adopt whichever accounting treatment that
presents its results and position in the best possible light. Sometimes, management might
deliberately mislead users of the financial statement.

Question 2
Accounting regulations in Nigeria
Answer 2
The major sources of regulations are:
 Accounting standards;
 Company law;
 Sectoral regulations; and
 The listing rules of the relevant Stock Exchange, for listed companies.

 Accounting standards are authoritative statements of how particular types of

transactions and events are reflected in the financial statements. International Financial
Reporting Standards are used in Nigeria.

 Company law varies from country to country, but typically also it sets out rules for
determining profits available for distribution, issuing and redeeming share capital, the
reserves that a company must have and the uses to which they can be put. These matters
 are not covered in accounting standards. The main company law statute in Nigeria is the
Companies and Allied Matters Act 2020.

 Sectoral regulation may apply to certain industries, for example, the banking sector is
regulated by Central Bank of Nigeria, insurance sector y by National Insurance
Commission and pension by Pension Commission. Such regulations may specify peculiar
financial reporting requirements of the sectors. For The need for regulation Sources of
regulation Principles and rules 4 Chapter 1: Regulatory framework example, in Nigeria,
the Central Bank prudential guidelines override impairment provision of IFRS 9.

 Listing rules set out the information which entities must supply when their shares are
traded on a major stock market. They must comply with these rules in order to maintain
their listing. These rules include requirements relating to information, including financial
reports that entities must prepare and provide to the stock market while they are listed.

Question 3
Setting standards in Nigeria
Answer 3
The standard setting structure
The current structure of the organisations responsible for publishing international accounting
standards is as follows:

Illustration: Standard setting structure

IFRS
Foundation

IASB

IFRSAC IFRSIC
The IFRS Foundation
The foundation, a not-for-profit organisation is run by 22 trustees who are responsible for:
 the governance of the Foundation and the bodies within it; and
 fund-raising
The constitution of the Foundation includes a requirement that, in order to achieve a broad
international basis, there must be:
 6 trustees from the Asia/Oceania region;
 6 trustees from Europe;
 6 trustees from the Americas;
 1 trustee from Africa; and
 3 trustees who may be appointed form any area.
The International Accounting Standards Board (IASB)
The International Accounting Standards Board (IASB) is the standard-setting body of the
IFRS Foundation.
The IASB is responsible for developing international accounting standards. It has full
responsibility for all IASB technical matters, including the issue of IFRSs and revised IASs, and
has full discretion over the technical agenda of the IASB.
The objectives of the IASB are to:
 develop, in the public interest, a single set of high-quality global accounting standards;
  promote the use and rigorous application of those standards;
 to take account of the special needs of small and medium sized entities and emerging
economies; and
 to promote and facilitate the adoption of IFRS through the convergence of national
accounting standards and the international accounting standards.
The IASB consists of 14 members, all with a very high level of technical expertise in accounting,
are appointed by the trustees of the IFRS Foundation. Each IASB member is appointed for a
five-year term, which might be renewed once for a further five years.
Each IASB member has one vote, and approval of nine members is required for the publication
of:
 an exposure draft
 a revised International Accounting Standard (IAS)
 an International Financial Reporting Standard (IFRS)
 a final Interpretation of the IFRS Interpretations Committee (IFRSIC).
The IFRS Interpretations Committee (IFRSIC)
The role of IFRSIC is to issue rapid guidance where there are differing possible interpretations of
an international accounting standard. Its role is therefore to:
 interpret international accounting standards (IASs and IFRSs);
 issue timely guidance on issues not covered by an IAS or IFRS, within the context of the
IASB Conceptual Framework; and
 publish draft Interpretations for public comment. After studying responses to the draft
Interpretation, it will obtain IASB approval for a final (published) Interpretation
(anIFRIC)
The IFRS Advisory Council (IFRSAC)
The IFRS Advisory Council (IFRSAC) provides a forum through which the IASB is able to
gather opinions and advice from different countries and industries. The IFRSAC consists of
experts from different countries and different business sectors, who offer advice to the IASB.