Definition
The Accounting Standards Committee (ASC) was a joint committee of the Consultative Committee of Accountancy Bodies (CCAB), established in 1976 as a successor to the Accounting Standards Steering Committee. The ASC was tasked with setting accounting standards in the United Kingdom. It operated with part-time, unpaid members and faced significant scrutiny and doubts regarding its effectiveness. Consequently, it was replaced by the Accounting Standards Board (ASB) in 1990. Throughout its existence, the ASC issued 25 Statements of Standard Accounting Practice (SSAPs), many of which were later adopted by the ASB. The ASC also issued Statements of Recommended Practice (SORPs) and made meaningful contributions to enhancing financial reporting and accounting practices in the UK.
Examples
Example 1: Statements of Standard Accounting Practice (SSAPs)
One of the well-known SSAPs issued by the ASC is SSAP 2 - Disclosure of Accounting Policies. This statement aimed to standardize the way accounting policies were disclosed in financial statements, ensuring consistency and transparency for users of financial reports.
Example 2: Statements of Recommended Practice (SORPs)
The ASC issued various SORPs to provide guidance on accounting practices for specific industries or sectors. For instance, a SORP might offer detailed guidance for the charity sector, ensuring that financial reports are prepared in a manner that reflects the unique aspects of that industry.
Frequently Asked Questions (FAQs)
Q1: What was the primary purpose of the ASC? A1: The primary purpose of the ASC was to establish and issue accounting standards to enhance the quality and consistency of financial reporting in the UK.
Q2: Why was the ASC replaced by the ASB? A2: The ASC was replaced by the ASB due to concerns about its effectiveness, including issues related to its part-time, unpaid membership structure.
Q3: What significant contributions did the ASC make? A3: The ASC issued 25 Statements of Standard Accounting Practice (SSAPs) and various Statements of Recommended Practice (SORPs), significantly improving financial reporting and accounting standards in the UK.
Q4: How did the ASC impact financial reporting? A4: The ASC improved the general level of financial reporting and accounting in the UK by providing standardized practices, promoting transparency, and enhancing the overall quality of financial statements.
Q5: Are the standards issued by the ASC still in use today? A5: Many of the standards issued by the ASC were adopted by the Accounting Standards Board (ASB) and have continued to influence current accounting practices in the UK.
Related Terms
Accounting Standards Board (ASB)
The ASB is the successor of the ASC, established in 1990 to continue the work of setting accounting standards in the UK with a more robust and effective structure.
Consultative Committee of Accountancy Bodies (CCAB)
The CCAB is an umbrella organization for several professional accountancy bodies in the UK that initially set up the ASC.
Statements of Standard Accounting Practice (SSAPs)
SSAPs are statements issued by the ASC to outline standardized accounting practices and policies.
Statements of Recommended Practice (SORPs)
SORPs provide guidance on accounting practices for specific industries or sectors.
Online References
Suggested Books for Further Studies
- “Accounting and Finance: An Introduction” by Eddie McLaney and Peter Atrill
- “Financial Accounting and Reporting” by Barry Elliott and Jamie Elliott
- “UK GAAP 2019: Generally Accepted Accounting Practice under UK and Irish GAAP” by Ernst & Young LLP
Accounting Basics: “Accounting Standards Committee” Fundamentals Quiz
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