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ACCA Applied Knowledge · Financial Accounting · The regulatory framework

A company's shares are traded on a stock exchange. Which of the following best describes the nature of the exchange's listing rules in relation to the company's financial reporting?

Listing rules are conditions a company must satisfy to keep its stock exchange listing, and they can require disclosure beyond IFRS and company law. They do not replace accounting standards, and breaching them can lead to sanctions such as suspension or delisting of the shares.

  1. AThey are requirements the company must meet to keep its listing, and may add disclosures beyond those in IFRS and company lawCorrect
  2. BThey replace IFRS Accounting Standards for all listed companies
  3. CThey are issued by the IASB and apply to all companies worldwide
  4. DThey are voluntary best-practice guidance with no consequences for non-compliance

Explanation

Listing rules are set by the exchange or securities regulator and are a condition of being listed. They can require extra disclosures, such as more frequent reporting. They do not replace IFRS, are not issued by the IASB, and non-compliance can lead to suspension or delisting.

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