In Chapter 1 we explained that there is no general theory of accounting in existence to guide us in the preparation of financialstatements. We explored the attempts of several bodies to buildconceptual frameworks of accounting and concentrated on the work of the ASB in developing its
Statement of Principles for Financial Reporting
. In spite of the lack of theory, there are many rules whichgovern the preparation of financial statements.Rule setters affecting the United Kingdom come in three main forms,each of which has different powers and sanctions available to it:
at both the United Kingdom and European Unionlevels. These operate through legislation.