Chic P

external regulations affecting accounting practice
l e g i s l a t i o n
The term ‘legislation’ covers a wide range of regulations based on UK Acts
of Parliament and European Directives. Organisations are affected by a
number of legal regulations affecting the way in which an accounting system
operates. Examples include:
n taxation regulations – affecting areas such as:
– PAYE for individuals on the payroll: income tax, National Insurance
and other deductions
– Value Added Tax: VAT returns, invoice format, rates applied
– corporation tax paid by limited companies
n company law – set out in the Companies Acts – requires that company
financial statements (of larger companies) should be audited; these
statements are to be drawn up in a set format and sent to shareholders;
larger companies also have to send full versions of these statements to
Companies House where they can be accessed by the public
n data protection law – set out in the Data Protection Act 1998 – protects
data (including financial data) relating to individual customers
n late payment law – set out in the Late Payment of Commercial Debts
Regulations 2013 – allows suppliers to charge interest on late payment of
u K a n d i n t e r n a t i o n a l a c c o u n t i n g s t a n d a r d s
The Financial Reporting Council (FRC) is a unified, independent regulator
n sets, monitors and enforces accounting and auditing standards
n oversees the regulatory activities of the professional accountancy bodies
n regulates audit
n promotes high standards of internal regulation within companies
(‘corporate governance’)
The membership of the Council includes wide and balanced representation
at the highest levels from the business, investor, professional and other
communities interested in corporate reporting and governance.
The FRC promotes good financial reporting through its Committees and
Councils, which include the Accounting Council and the Audit and
Assurance Council....