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ACCA Applied Knowledge · Financial Accounting · The regulatory framework

Which of the following is the primary reason why the IFRS Foundation Monitoring Board exists?

The Monitoring Board provides public accountability by overseeing the IFRS Foundation Trustees, who in turn govern the IASB's standard-setting. It does not draft standards, audit companies or penalise preparers. Those roles belong to the IASB, external auditors and national regulators or enforcers.

  1. ATo provide public accountability by overseeing the IFRS Foundation's governance of the standard-setting processCorrect
  2. BTo draft individual IFRS Accounting Standards for approval by the IASB
  3. CTo audit the financial statements of listed entities that apply IFRS
  4. DTo enforce compliance with IFRS by imposing penalties on preparers

Explanation

The Monitoring Board links the Foundation to public authorities, such as securities regulators, and provides public accountability for the Trustees' oversight of the IASB. It neither drafts standards, audits companies nor imposes penalties on preparers, which are matters for the IASB, auditors and national enforcers respectively.

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