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ACCA Applied Skills · Financial Reporting · Regulatory framework

The IFRS Foundation is developing a new IFRS Accounting Standard. Under its due process, which of the following steps is a required (mandatory) step before the International Accounting Standards Board (IASB) issues the final Standard?

The mandatory step is publishing an exposure draft for public comment. The IASB must expose proposals before finalising a Standard. National standard-setters do not hold a veto, Trustees do not approve technical content, and the Interpretations Committee does not ratify new Standards.

  1. APublishing an exposure draft of the proposed Standard for public commentCorrect
  2. BObtaining formal approval of the draft Standard from every national standard-setter
  3. CHolding a binding vote of all IFRS Foundation Trustees on the technical content
  4. DSubmitting the draft Standard to the IFRS Interpretations Committee for ratification

Explanation

Publishing an exposure draft for public comment is a mandatory step in the IASB's due process. Other steps, such as a discussion paper, are non-mandatory. The Trustees oversee due process but do not vote on technical content. National standard-setters are consulted but have no veto. The Interpretations Committee deals with application issues, not ratification of new Standards.

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