Quiz: How well do you know financial reporting standards?

Why is it essential for an accountant to stay up to date with the latest accounts preparation standards? Because the quality of financial reports, and the veracity of their underlying data, reflects as much on the accountant as on the business.

“There are a couple of aspects to why accountants must stay up to date,” says Tim Pinkney, IFA Director of Professional Standards.

“External readers of financial statements might be looking at them for things like loan applications or investment opportunities. So, the ability to be able to report an accurate set of financial statements in accordance with best practice is essential for investor confidence.”

Inaccurate reporting also reflects badly on the company and its directors and partners, he says.

“But ultimately, if the accountant hasn’t reported facts in accordance with regulatory, statutory, financial standards, that can come back to bite them,” Pinkney says. 

“It can have legal ramifications. You could be challenged around misappropriation or suggestions of fraud. There could be suggestions that you have been complicit in money laundering.

“If you get a reputation for not being able to demonstrate your full understanding of the process, it will damage the client's business and your own. Clients will lose confidence in you.”

How familiar are you with the standards governing the preparation of financial statements? Take our six-question quiz and find out. 

Keep an eye out at the end of the week for a wrap up of results and explanations for each answer.