ACCT403 – Advanced Accounting:  Synthesis of SOCPA standard on “Consolidated Financial Statement”.

Dear Students,

You are required to evaluate the SOCPA (Saudi Organization for Certified Public Accountants) standards on Consolidation. By evaluation I meant – you examine critically SOCPA standards on CONSOLIDATION by looking at (1) objective of the standard (2) measurement issues (3) relate measurement rules with Conceptual Framework. (3) Where possible compare with IFRS stanard on consolidation. (4) your overall assessment.

Submission guidelines

Length – Max 10 pages including references
font size 12 Times Roman.

⦁ A cover page – which should (i) include your name ; (ii) and an abstract of your synthesis
⦁ Page 2 – Introduction, objective, findings and structure of your report
⦁ Pages 3-8 discussion and analysis including in text references
⦁ Page 9 – conclusions and suggestions
⦁ Page 10 – references
⦁ Spelling and Grammar need to be proper
⦁ Should be submitted through TurnITIN

Once again, you need to make critical evaluations of “SOCPA Standard on Consolidation”. To evaluate you can analyses the standards – looking at conceptual framework. Evaluate with IFRS. Make critical comments etc. You may want to to start by visiting their site and examining their publications. Also,as future accountants beware of cheating, dear students as it wont be tolerated.

Sample section of a 14 Page paper

Synthesis of SOCPA Standards on Consolidated Financial Statements

Abstract

This paper takes a look at the SOCPA accounting standard on the consolidation of financial statements as applies in Saudi Arabia. It examines the standard in terms of its objective and how the objective is to be met, the scope of application and exemption of application, the definition and determination of control, power, returns and the link between returns and power as applies to the consolidation of financial statements. The determination of what makes an entity an investment entity and conditions that would exempt investment entities presenting consolidated financial statements according to the recommendations of the standard. It further looks at the details of the accounting requirements in the preparation of consolidated financial statements by scrutinizing the issues of non-controlling interests and the loss of control.

 Introduction

In light of the transition project by the Saudi Organization for Certified public Accountants (SOCPA) to IFRSs endorsed by the International Accounting Standard Board (IASB) this paper seeks to investigate the standards of consolidated financial statements. The paper evaluates the requirements for the preparation and presentation of consolidated financial statements, requiring entities to consolidate entities they control. It does this by examining the objectives of the standard, the measurement issues surrounding the standard, relates the measurement rules with the conceptual framework and compares the SOCPA standard on consolidated financial statements with the IFRS standard on consolidation.

The paper finds that the key principle in the consolidation of financial statements is the existence of control, and where an investor has power over an investee; in that due to an investor’s involvement with an investee, if the investor is exposed to variable returns, then consolidation is required. The paper finds that the standard gives ample guidance on the determination of who has control and what elements give control and transactional involvement by structured entities or groups that have complex group structures. The paper also finds that no disclosure requirements are contained in this standard. In addition to this the paper finds that investment entities as per the qualifying definition provided are exempted from consolidation of the investees under their control but in place of consolidation