In November 1987, the CCAB (the Consultative Committee of Accountancy Bodies) appointed a review committee led by Sir Ron Dearing to recommend changes to the accounting standard-setting process. This was within the light of varied accounting ‘manoeuvres’ which some companies had adopted to evade the principles.
In September 1988, the committee recommended that accounting standards should be issued by a replacement, totally independent body to be called the Accounting Standards Board (ASB). it absolutely was to supersede the Accounting Standards Committee which had issued standard statements of accounting practice (SSAPs) on topics like accounting for stocks and VAT.
The Financial Reporting Council was also created to supply guidance to the new Accounting Standards Board on the suitable priorities.
The Dearing committee recommended the putting in place of a Review Panel additionally, to appear at contentious departures from accounting standards by large companies.
The Accounting Standards Board, the Financial Reporting Council, and therefore the Review Panel were founded in 1990. The Accounting Standards Board goes through a large consultative process and issues exposure drafts called FREDs! These are Financial Reporting Exposure Drafts.
They come out before financial reporting standards are issued. By October 1998, 14 financial reporting standards had been issued. the themes range from income statements, through acquisitions and mergers, to associated companies and joint ventures.
To improve the promptness of its response to big issues, a committee was set up: the Urgent Issues Task Force. Its purpose is to think about areas where an accounting principle or a Companies Act provision exists, but where unsatisfactory or conflicting interpretations have developed or are expected to develop within the future. The disclosure of directors’ share options is an example.
The comparable body to the Accounting Standards Board within the u. s. is that the Financial Accounting Standards Board, founded in 1973.
Internationally, the International Accounting Standards Committee produced its framework for the preparation and presentation of monetary statements in 1989. The International Accounting Standards Committee itself was founded in 1973. Its members are drawn from professional bodies throughout the planet. There are quite 100 of them from over 80 countries and it issues its own accounting standards.