The Framework's purpose is to assist the IASB in developing and revising IFRSs that are based on consistent concepts, to help preparers to develop consistent accounting policies for areas that are not covered by a standard or where there is choice of accounting policy, and to assist all parties to understand and interpret IFRS.
In the absence of a Standard or an Interpretation that specifically applies to a transaction, management must use its judgement in developing and applying an accounting policy that results in information that is relevant and reliable. In making that judgement, IAS 8.11 requires management to consider the definitions, recognition criteria, and measurement concepts for assets, liabilities, income, and expenses in the Framework. This elevation of the importance of the Framework was added in the 2003 revisions to IAS 8.
The Framework is not a Standard and does not override any specific IFRS.
If the IASB decides to issue a new or revised pronouncement that is in conflict with the Framework, the IASB must highlight the fact and explain the reasons for the departure in the basis for conclusions.
The Framework addresses:
‘The Vatican said on Saturday it had ordered the first external audit of its assets as part of a drive by Pope Francis to bring transparency to its finances where millions of euros have gone unrecorded without any central oversight.
Papal spokesman Federico Lombardi said auditors PricewaterhouseCoopers [PWC.UL] would start work immediately.
The pope has promised to overhaul the Vatican's murky financial management, which have been hit by repeated scandals in recent years, however he has met resistance from Church officials who want to maintain tight control over operations.
Lombardi told reporters that the Vatican's Secretariat for the Economy had called on PwC, the world's second-largest audit firm by revenue, to review the Vatican's consolidated financial statements, which includes assets, income and expenses.
The decision to work with one of the world's top four auditors continued "the implementation of new financial management policies and practices in line with international standards," he said.
A Vatican financial statement this year revealed that Vatican departments had stashed away 1.1 billion euros ($1.2 billion) of assets that were not declared on any balance sheet.
The head of the economy secretariat, Cardinal George Pell, said last year that departments had "tucked away" millions of euros and followed "long-established patterns" in jealously managing their affairs without reporting to any central accounting office.
Pope Francis picked Pell, an outsider from the English-speaking world, to oversee the Vatican's often muddled finances after decades of control by Italian clergy.
Since the pope's election in March, 2013, the Vatican has enacted major reforms to adhere to international financial standards and prevent money laundering.’
EXTENDED AUDITOR REPORTING has allowed investors to glean far greater information and understanding of the state of their businesses, the FRC has found in its latest report.
Auditors continued to develop high quality, accessible reports in the second year of extended auditor reporting according to an FRC survey
In particular, reports which have earned the greatest praise from investors tend to be well structured, signpost key information and often make innovative use of graphics, diagrams and colour. Auditors, the review found, have continued to move away from generic language and descriptions of risk, making their reports more relevant and insightful, while descriptions of the scope of audit work and the approach to materiality continue to improve.
Areas where auditor's reports could be further enhanced include more frequent inclusion of commentary about what the auditor found as a result of the work done on risks of misstatement; explanations of changes to the audit approach, materiality or risk assessment over time; more auditors to include information about ‘performance materiality' - how it is derived and how it impacts on the audit.
The FRC introduced new reporting requirements for financial years beginning on or after 1 October 2012 at the same time as enhancements to the UK Corporate Governance Code, including more detailed annual reporting by audit committees.
Executive director for codes and standards Melanie McLaren said: "Confidence in UK audits underpins investor confidence in UK capital markets and we are pleased that we have led the way internationally in extended auditor reporting, which is being adopted more widely following changes to international standards on auditing.
On the board are Stewart MacDonald (managing partner), Bernadette Higgins, Chris Brown, Nick Bennett and Gareth Magee. They will also be responsible for substantial improvements to efficiency including major IT investments.
Scott-Moncrieff continues to improve its infrastructure after making a number of additions to its staff last year, including the appointment of former Grant Thornton chief Gary Devlin and the promotion of Alison Gibson to partner in its Glasgow office.
Board member Stewart MacDonald says that the new board is an "important development" for Scott-Moncrieff as they look to embark on a five-year strategy.
"The new approach underlines the importance that our strategy places on our own business. Our standard of client service has always been extremely high. What we're seeking to do now is to ensure that our operational areas are just as highly regarded and are geared up to boost our growth potential," he said.