The Conceptual Framework Of Financial Statements

1248 Words Feb 18th, 2015 5 Pages
1.0 Introduction:

As Miracel Griff (2014) stated accounting is a science that is involved in the reading, monitoring and assessment of the financial affairs of a business at any time. In accounting procedures one cannot make a rational choice without some framework of principle (Macve, 1981).
The Conceptual framework was introduced in 1989 by the International Accounting standard board also known as IASB. A conceptual framework comprises of a set of basic principles that give general support and can assist with detailed decisions by increasing the like hood of consistency and reducing the cost of analysis. In financial reporting, a conceptual framework sets out the concepts that underlie the preparation and presentation of financial statements (FRC, 2015).

The Conceptual framework for the preparation and presentation of financial statements is designed to:

• Assist the Board of the IASB in developing new standards and reviewing existing ones
• Assist in harmonizing accounting standards and procedures
• Assist national standard-setting bodies in developing national standards
• Assist preparers of financial statements in applying IASs/IFRSs
• Assist auditors in forming an opinion as to whether financial statements conform with IASs/IFRSs
• Assist users of financial statements in interpreting financial statement

Conceptual framework also highlight the attributes/qualitative characteristics that information included in financial statements should have .This…
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