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Shvoong Home>Business & Finance>Accounting>Roles and Responsibilities of the Board of Accounting Standards Review

Roles and Responsibilities of the Board of Accounting Standards

Article Review   by:HealthyWealthy    
Aims and Objectives

  • The Board has the following objectives: 

The Board serves the public interest by setting Standards of Generally Recognized Accounting Practice (GRAP) and providing guidance for financial and other performance information reported by the public sector.
In meeting its objectives, the Board shall:
a. Be committed to serve the public interest.
b. Respect and encourage input from all its stakeholders.
c. Bring objectivity to the consideration of issues.
d. Respect the ability of its stakeholders to exercise professional judgment.
e. Be committed to timeliness in its responses to stakeholder needs.

  • Responsibilities 

The Board has the following responsibilities:
a. Determine the work programmed and approve the appointment of members of project groups.
b. Approve the Standards to be issued as Standards of Generally Recognized Accounting Practice (GRAP) for the preparation of annual financial statements of all spheres of government.
c. Prepare and publish directives, interpretations and guidelines concerning the Standards of GRAP.
d. Recommend to the Minister of Finance effective dates for the implementation of these Standards by different categories of institutions to which these Standards apply.
e. Perform any other function incidental to advancing financial reporting in the public sector.
f. To issue and publish recommended practices on its own authority, if satisfied as to need, usefulness and practicality, following a process of consultation with Stakeholders.

  • Accountability 

The Board is accountable to the Minister of Finance to demonstrate that it has fulfilled its mandate effectively, efficiently and economically. Its financial statements are audited and its annual report is tabled in Parliament. 
  • Composition and Term 

Membership of the Board

The Board consists of no more than ten members as determined by the Minister of Finance. At present the Board consists of seven members as follows:
a. A non-executive Chair with a three-year term of office;
b. Six other non-executive members each with a normal term of office of three years, which is renewable on a rotating basis.

The terms of the Board members shall be arranged with staggered expiry dates so there will be an orderly rotation of membership each year.

Board members are appointed in their individual capacity and not as representatives of any organization. The chairman is elected by the members of the Board and not appointed by the Minister.

  • The role of the Chair includes: 
a. Presiding over Board meetings and management meetings and communicating with members between meetings, as necessary, concerning Board’s activities; and
b. Provide direction and guidance to the secretariat as required.
c. Participate in road shows and public forums to promote the activities of the Board.

  • Selection Process 

Members of the Board are selected to ensure that it has an appropriate balance of competencies and experiences to meet its objectives. Membership will normally represent those responsible for financial reporting or auditing. Other members may include public accountants, officers of public sector organizations and enterprises, legislators, investors, economists, financial analysts and academics. The members of the Board provide input regarding individuals for potential membership on the Board to the Minister of Finance. The Minister of Finance may, but need not necessarily, accept such recommendations. The Minister consults the Auditor-General before making the appointments.

  • Consultation and Communication 

Communication and promotion of the activities of the Accounting Standards Board with all stakeholders is an integral part of the Board’s strategic and operating planning processes. These activities include communications designed to help improve the understanding of complex materials.

The Board actively solicits input on proposed accounting standards or guidance by issuing draft documents inviting public comment. Workshops and presentations are used to approach preparers, auditors and users of financial and other performance information directly for their input.

The National Treasury provides examples and implementation guidance, if appropriate, to assist preparers, auditors and other constituents in understanding and applying complex Standards consistently.

The Board publishes an electronic newsletter, maintains an internet website and provides other appropriate information to assist preparers, auditors and other users of financial and performance information.

  • Decision Making 

Decisions of the Board to release an exposure draft, approve a Standard of GRAP a guideline, interpretation or directive require a vote of at least 50% +1 of all Board members.

Each member has one vote. The Board members are expected to vote according to their own beliefs and not as representatives voting according to the views of the firm, organization or constituency with which they are associated.

  • Reporting 

The Board reports annually on its activities as required by the PFMA.

The Board shall review its Regulations to ensure that they continue to meet the needs of the Board and the public.

Meetings of Board are normally held at least four times a year. Additional meetings may be convened to achieve Board’s objectives.

Meetings are open to public subject to adherence to the observers’ policy. Others may also attend meetings as requested by the Chair to provide specific expertise.

  • Funding 

The Board is funded by a transfer payment from Parliament.

Published: September 27, 2010   
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