FRS 1

The relationship between law and standards Companies act formed in 1900 - compulsory audit of the balance sheet - not the director. Bigger business, role of directors determined by shareholders - appointing auditors, the requirement for a consistent approach. 1948 Companies act - balance sheet and profit loss account must give a true and fair view, disclosure levels introduced, audit requirements established. The accounting profession took on more responsibility. From 1948 because of SCANDALS (Pollypeck) - present, more …

…consistently applied to situations (type C) In the uk type a = type c - balance between pronouncement and practise. Shifting further in the form of pronouncement Essential purpose of TFV override - Nobes 1)<Tab/>to guide standard setters when developing type c rules 2)<Tab/>to enable auditors to depart from type c rules when necessary. Risks of creative accounting, departing from the right TFV view - FRRP.