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1 - Introduction

from Part I - The accounting environment

Published online by Cambridge University Press:  02 November 2009

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Summary

Aim of this book

Collectively, a board of directors is responsible for the company's annual report and financial statements, yet most directors are not accountants. The primary aim of this book is to explain accounting to those non-executive directors who are not accountants. The book may also be useful to executive directors who are not accountants, and even to directors who are accountants but who have not worked actively in their profession for some time. To some extent this means explaining accounting as one would to any group of intelligent non-accountants. However, we emphasise those aspects that are particularly relevant to the directors of listed companies. For example, in chapter 4 we emphasise the work of the Financial Reporting Review Panel, a body that monitors financial statements and enforces compliance with accounting standards, because while its remit remains public and large private companies, a large focus of its attention is listed companies. Similarly, the specific subjects covered in Part II reflect the likely interest of directors of listed companies: mergers and acquisitions, financial instruments, earnings per share, share-based payment and realised and distributable profits are all discussed. However, the reader will find little on inventory valuation and methods of depreciation, as these are less controversial areas. Similarly, this book does not deal with accounting for special industries and sectors such as banks, insurance companies and charities. As the group financial statements of listed companies must now be prepared using International Financial Reporting Standards (IFRS), rather than UK GAAP, the emphasis in each chapter is on IFRS. How IFRS is applied in the UK, where there are choices, is often influenced by previous UK practice and we discuss this previous UK practice where relevant.

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Publisher: Cambridge University Press
Print publication year: 2009

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