RegulationAccounting StandardsAccounting standards reform ‘should go further’

Accounting standards reform 'should go further'

Reform could benefit smallest companies and make financial reporting simpler for all stakeholders

ACCOUNTING STANDARDS reform should stretch to encompass the smallest entities, according to the ICAEW.

Dr Nigel Sleigh-Johnson, head of the Financial Reporting Faculty, said the Accounting Standards Board should follow a recent consultation on International Financial Reporting Standards for SMEs (FRSME) with a similar piece of work for smaller companies.

He said: “Retaining separate simplified standards for small companies seems unnecessarily complex; there would be three different rule books for UK accounting. We doubt that this is the optimal solution: it complicates training and systems and increases the risk of error.”

Sleigh-Johnson said a successful move towards entirely IFRS-based accounting standards hangs on the setter’s ability to embed exemptions within the proposed FRSME framework.

Such simplifications as preparing consolidated accounts would reduce reporting requirements and might satisfy users of the current UK GAAP-based FRSSE standard, which is popular and considered easy to use.

The ICAEW has called for a consultation to be launched as soon as possible. Sleigh-Johnson said simplicity “is the critical issue” and that it should be less complicated to have all entities reporting on the same framework. He noted that FRSSE will have to be updated eventually, by which time it could be based on an outmoded UK GAAP.

Related Articles

Treasury Select Committee report released on Making Tax Digital

Accounting Standards Treasury Select Committee report released on Making Tax Digital

11m Stephanie Wix, Writer
New Year Honours of 2017

Accounting Standards New Year Honours of 2017

11m Stephanie Wix, Writer
Sports Direct implements FRC corrections in annual reporting

Accounting Standards Sports Direct implements FRC corrections in annual reporting

1y Stephanie Wix, Writer
Former CFO joins IASB board

Accounting Standards Former CFO joins IASB board

1y Stephanie Wix, Writer
Record fine for Deloitte and audit partner over Aero misconduct

Accounting Standards Record fine for Deloitte and audit partner over Aero misconduct

1y Stephanie Wix, Writer
'Clear' tax avoidance guidance for advisers issued by institutes

Accounting Standards 'Clear' tax avoidance guidance for advisers issued by institutes

1y Stephanie Wix, Writer
Cashflow statement improvements targeted by watchdog

Accounting Standards Cashflow statement improvements targeted by watchdog

1y Stephanie Wix, Writer
Eight landmarks in the history of accountancy

Accounting Standards Eight landmarks in the history of accountancy

1y Acccountancy Age