Conceptual framework

Question 1

What is the conceptual framework?

Answer 1

The foundation before any accounting related work can be done.

Question 2

The conceptual framework was made by the International Standard Board. What is there purpose for this?

Answer 2

They want to ensure that the public can receive high quality, understandable, and enforceable global accounting standards for comparable info.

Question 3

Outline 2 advantages for these standards.

Answer 3

The standards help to increase uniformity in the presentation of accounts and to reduce the subjective element in the disclosure of info.

Question 4

State 6 reasons why these standards are important.

Answer 4

1. To determine the minimum info to be included in the financial statement
2. To establish what must be disclosed by different forms of business organizations
3. To ensure consistency on the application of accounting methods
4. To foster easy comparison
5. To set a bench-mark for understandability
6. To ensure verification by external auditors.