QUESTIONS ABOUT ACCA AND THE 'RELATED
PARTY TRANSACTIONS ACCOUNTING STANDARD'
ACCA claims that it complies with FRS "Related
Party Disclosures". Does it really?
The objective of FRS 8 is to ensure
that financial statements contain the disclosures necessary to draw attention
to the possibility that the reported financial position and results may
have been affected by the existence of related parties and by material
transactions with them.
Two or more parties are related when
at any time during the financial period:
-
one party has direct or indirect control over
the other party; or
-
the parties are subject to common control
from the same source; or
-
one party has influence over the financial
and operating policies of the other party to the extent that that other
party might be inhibited from pursuing at all times its own separate
interests; or
the parties, in entering a transaction,
are subject to influence from the same source to such an extent that one
of the parties to the transaction has subordinated its own separate interests.
FRS8 requires the disclosure of:
-
information on related party transactions;
and
-
the name of the party controlling the reporting
entity and, if different,
that of the ultimate controlling party
whether or not any transactions between the reporting entity and those
parties have taken place.
Now here is the problem. ACCA's 2001 annual
accounts do not provide a list of the directorships held by by ACCA officeholders,
council members, or chief executive. This information would enable the
readers of accounts to make sense of the conflict of interests, if any.
But for some reason the ACCA accounts are silent. Why? Is this deliberate
or an oversight?
In the next few days, we hope to provide
a list of directorships held by some ACCA officials. ACCA members would
be surprised by what they see!