Governance and Reporting

Upon successful completion of this subject, students will be able to
• define a limited company
• weigh the advantages and disadvantages of operating as a limited company
• distinguish between public companies and private limited companies
• distinguish between issued, authorised, called-up, and paid-up share capital
• distinguish between ordinary shares and preference shares
• define reserves, and distinguish between capital and revenue reserves
• describe the share premium account, and outline its uses
• explain the nature and purpose of a dividend
• define a debenture
• define gearing, and explain its importance
• outline the nature of corporation tax
• discuss principles of corporate governance
• discuss agency theory and agency costs
• understand the structure of corporate boards
• assess the role of auditors
• assess the role of non-executive directors
• trace the development and evaluate the significance of relevant reports and codes
• discuss the (2001) Myners' Report
• explain the main recommendations of the Higgs Report and Smith Report, and the revised Combined Code
• explain the main provisions of the Sarbanes-Oxley Act in as far as they affect
• UK-domiciled companies
• distinguish between branches, subsidiaries, associated companies, and
• joint ventures
• distinguish between the three accounting methods (also known as approaches) known as consolidation; the equity method; and the cost method
• outline the legitimate uses a multinational corporation (MNC) can make of offshore vehicles
• discuss possible drawbacks of an MNC using an offshore finance centre (OFC)
• evaluate the advantages of low-tax jurisdictions compared with zero-tax
jurisdictions
• outline types of ship registry, and indicate the largest open registries
• discuss the expression 'flag of convenience'
• evaluate the advantages and potential disadvantages of registration in an offshore centre
• discuss whether a ship needs to be locally owned and locally managed in the offshore centre selected
• discuss the effectiveness of single-, two and three-tier offshore trust and company structures for investment and property holding and designed to avoid or reduce probate formalities, to provide confidentiality, to offer protection against
• creditors or forced heirs, or for receiving payments of commissions or royalties
• discuss potential problems if the client wishes to retain an element of control
• define a partnership, and distinguish between types of partnership, and state
• which are more commonly found offshore
• discuss the structure, and possible tax effects of offshore limited partnerships,
• together with their formation, typical periodic requirements, and main uses as investment vehicles, asset-protection vehicles, and quasi-trusts
• discuss the scope and focus of the OECD Report on the Misuse of Corporate Vehicles, with reasons why offshore companies are often thought apt for misuse
• outline the three Fundamental Objectives recommended by the report
• evaluate the options for obtaining

FINANCE-SECTOR REGULATION
• explain types of banking licence issued, and government attitudes to the granting of banking licences
• assess offshore banking and investment industry regulation and supervision

 

PART 2 REPORTING AND INTERPRETATION
Students will be able to:
• outline the impact of the Companies Act 1985 (CA85) on financial accounting
• explain why CA85 specifies a layout for the published profit-&-loss account and balance sheet of a limited company
• outline the main CA85 provisions relating to the presentation of published accounts
• outline the nature, scope and authority of accounting standards
• explain the nature of SSAPs and FRSs
• discuss the relative merits of standardisation and choice of accounting
• treatment
• identify the elements of Generally Accepted Accounting Practice (GAAP),
• and the advantages of International Accounting Standards (IASs)
• distinguish between UK and US approaches to substance and form
• explain the need to hold income and capital separately
• describe what constitutes income
• describe the restrictions on accumulation
• outline what constitutes capital and rules on advancement and appropriation
• draw up a balance sheet, and provide a schedule of trust investments and
• movements
• provide meaningful notes to the accounts and comment on performance and
• revaluation
• prepare an income-&-expenditure account and a capital account
• draft a trustee report
• explain differences in accounting for discretionary trusts, accumulation-&-
• maintenance trusts, and interest-inpossession trusts
• explain the obligations of trustees to prepare financial statements, and how and why these differ from the responsibilities of directors of companies.
• describe the standard setting process
• understand the importance of the two underlying accounting concepts as per explain the nature and purpose of accounting conventions
• define depreciation in accordance with FRS 15
• explain how to account for changes in the estimated useful life of a fixed asset
• explain how to account for a change of depreciation policy
• show and explain how the balances will be disclosed in the financial statements in accordance with FRS 15
• explain revaluations and devaluations, and make and explain calculations
• define the scope of FRS 3
• outline the main provisions of FRS 3 relating to the presentation of published accounts
• prepare notes for statement of total recognised gains and losses,
• reconciliation of movement in shareholder’s funds and note of historical
• cost profit and losses
• define and give examples of intangibles
• define goodwill as per FRS 10
• distinguish between the different types of goodwill
• describe valuation methods for goodwill as per FRS 10
• define and explain research and development in accordance with SSAP 13
• classify expenditure as pure or applied research or development
• outline the accounting treatment of R & D
• show how to disclose R & D in accordance with SSAP 13
• define PBSEs in accordance with FRS 21
• differentiate between adjusting events and non-adjusting events
• outline the accounting treatment for PBSEs as per FRS 21
• define provisions as per FRS 12
• define contingent liabilities and contingent assets in accordance with FRS 12
• distinguish between the different categories of contingency
• outline the accounting treatment and disclosure requirements in accordance with FRS 12
• list the internal and external users of financial statements
• outline what information may be particularly relevant to each user group
• explain the important features of financial statements
• explain why understandability is an important characteristic of financial statements
• discuss the purpose of cashflow statements
• explain the need for a cashflow statement
• outline the standard format for a cashflow statement and for the relevant notes
• prepare a cashflow statement in accordance with FRS 1
• assess the usefulness of the information given by the cashflow statement