ExpertMedium2 marksMultiple Choice
ACCA · Question 15 · The Conceptual and Regulatory Framework
SECTION A
Which TWO of the following statements regarding the regulatory framework and the standard-setting process are CORRECT?
SECTION A
Which TWO of the following statements regarding the regulatory framework and the standard-setting process are CORRECT?
Answer options:
A.
The IFRS Foundation is responsible for the governance and funding of the International Accounting Standards Board (IASB).
B.
The IASB has the legal authority to enforce compliance with IFRS Standards globally.
C.
The IFRS Interpretations Committee provides guidance on newly identified financial reporting issues not specifically addressed in IFRSs.
D.
A Discussion Paper is the mandatory final step before an IFRS Standard is issued.
How to approach this question
Review the roles of the IFRS Foundation, IASB, and Interpretations Committee. Remember that the IASB sets rules but cannot enforce them legally.
Full Answer
The IFRS Foundation oversees, governs, and funds the IASB. The IFRS Interpretations Committee issues guidance on ambiguous or unaddressed issues. The IASB does not have enforcement powers (this is left to national regulators like the SEC or FCA). A Discussion Paper is an optional early step in standard-setting, whereas an Exposure Draft is mandatory.
Common mistakes
Believing the IASB can legally enforce its standards worldwide.
Practice the full ACCA FR — Financial Reporting Practice Exam 3
32 questions · hints · full answers · grading
More questions from this exam
Q01SECTION A
Nexus Innovations, a tech startup, is preparing its first set of financial statements ...EasyQ02SECTION A
CyberShield Inc. sells a software license bundled with 12 months of mandatory technica...MediumQ03SECTION A
Titanium Forge Co, a heavy manufacturing firm, revalued its main factory building for ...EasyQ04SECTION A
AgriTech Solutions is developing a new automated irrigation system. Under IAS 38 Intan...MediumQ05SECTION A
Skyward Aviation entered into a 5-year lease for a maintenance hangar. The annual leas...Hard