Our response to the UK Accounting Standards Board's consultation on The Future of UK GAAP placed great emphasis on convergence of accounting standards in the UK and Ireland as necessary so that all companies in these countries report under a single set of accounting principles.
ACCA believes that there is little sense in maintaining the current system, where three tiers of accounting standards are in operation; international financial reporting standards (IFRS), full UK and Ireland standards and financial reporting standards for smaller entities (FRSSE). Instead, we want to see the use of full IFRS and IFRS for small and medium-sized enterprises (SMEs), with the phasing out of the FRSSE.
The benefits are numerous, including the comparability between the reports of listed and unlisted companies in the UK and Ireland. The comparability between reports of companies across jurisdictions, which would contribute to cross-border trade and 'levelling of the playing field'. The preparation of accounting information on a more consistent basis, helping to simplify internal reporting, and so reducing costs for companies.
In addition, the adoption of a single set of standards would bring greater simplicity for accountants in preparing or auditing financial statements as familiarity with only one basis for preparation would be required. This in turn would reduce the scope for confusion and complexity. The training and education of accountants and users would be simplified by being based on a single system of financial reporting. And we must not forget the substantial savings of resources involved in maintaining a separate system of UK GAAP.
As ever, your views on this are welcome.
ACCA believes that there is little sense in maintaining the current system, where three tiers of accounting standards are in operation; international financial reporting standards (IFRS), full UK and Ireland standards and financial reporting standards for smaller entities (FRSSE). Instead, we want to see the use of full IFRS and IFRS for small and medium-sized enterprises (SMEs), with the phasing out of the FRSSE.
The benefits are numerous, including the comparability between the reports of listed and unlisted companies in the UK and Ireland. The comparability between reports of companies across jurisdictions, which would contribute to cross-border trade and 'levelling of the playing field'. The preparation of accounting information on a more consistent basis, helping to simplify internal reporting, and so reducing costs for companies.
In addition, the adoption of a single set of standards would bring greater simplicity for accountants in preparing or auditing financial statements as familiarity with only one basis for preparation would be required. This in turn would reduce the scope for confusion and complexity. The training and education of accountants and users would be simplified by being based on a single system of financial reporting. And we must not forget the substantial savings of resources involved in maintaining a separate system of UK GAAP.
As ever, your views on this are welcome.
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