According to the paper the financial statements of different companies must be able to satisfy the needs of a variety of users who mostly want to compare one company with another. When a standard is followed by all the companies, the financial statements become reliable for the users as they can safely compare all the companies and make important financial decisions. Accounting, therefore, entails a statement of accepted accounting rules. These rules form the structure of reference for the financial reporting. The conceptual framework forms the foundation for expansion of new accounting criteria and the assessment of those standards that are already in place. Further, it forms the basis for establishing which events should be accounted for and how the same should be released to the accountants. Functions of conceptual framework Conceptual framework lays out the objectives of the financial statements. Financial statements are meant to reflect the financial standing of institutions. Conceptual framework of accounting therefore offers the foundation and the guidelines that should be followed to reveal the economic situation of an institution at a given period of time. Financial statements include the balance sheet, the income statements, statement of cash flow and the statement of shares holders’ equity. Conceptual framework also identifies the qualitative characteristics which establish the importance of the information in the financial statements. Financial statement reveals the financial situation of an institution; they are very important for the stakeholders of the institution. Shareholders and other interested parties in an institution are guided by the financial information of that institution From this discussion it is clear that the conceptual framework offers guidelines to framing of financial statements. Conceptual framework requires the financial statements of a company to provide a true and fair view. This means that all the information provided in the financial statements must be free from fraud or material misrepresentation. The framework requires the financial statements to have four qualitative characteristics which ensure that they give a true and fair view of an entity’s financial position. Firstly, the statements need to be understandable which means that they must be free from any ambiguity that might mislead a user. Secondly, the financial statements need to be relevant. Information is relevant when it is able to influence the economic decisions of the users. It should be predictive in the sense that a user must be able to make reliable predictions about an entity’s future by using the information. It must also be confirmatory which is achieved when it confirms the previous predictions of users regarding an entity. Thirdly, the information needs to be reliable. Information that is free from material errors and bias is regarded as reliable. Reliable information is faithfully represented, neutral, prudent, and complete and substance is given priority over legal forms of various elements.
This essay, Developing a Conceptual Framework is an Impossible Possibility, declares that conceptual framework for accounting lies at the very base of financial accounting in the professional field. This is a component in accounting process developed to help accountants in carrying out their work. …
Business environment has become complex. Various internal and external factors contribute in this complexity. Organisations have no choice but to determine and manage the risks. Business continuity management system is a wide fit-for purpose standard. This standard entails the fundamental components essential to guiding an organisation on different organisational matters.
It is imperative to understand what development is and what is the difference of priorities in different countries regarding developmental policies; it is only then that once can truly serve justice to the topic. It is stated in a paper produced in the year 2004, published by World Bank that development holds a different meaning in various countries.
Accounting plays a significant role in a business entity; it is prepared by the company to inform the public of the company’s performance and progress, which attracts more potential investors to the company to inject more capital and enhance the growth of the enterprise (Deegan and Unerman, 2009).
The conceptual framework provides guidance on the boundaries of financial accounting and other events related to it. The accounting conceptual framework was developed as early as 1970s. The Financial Accounting Standards Board (FASB) is in charge of developing and reviewing the frameworks.
It is the main persistence behind the development of accounting principles. The framework act as a backbone to the US based accounting standard GAAP (Generally Accepted Accounting Principles) for evaluation of existing and new development in accounting standards.
As multinational corporations and similar to them structures win the global market of goods and services, it has become evident that the specific strategy of multinational management should exist on the basis of the already known management notions and theories.
Accounting is also entails a statement of accepted accounting rules. This rule forms the structure of reference for the financial reporting. Out of the above statement therefore, conceptual framework forms the
The accounting conceptual framework was developed as early as 1970s. The Financial Accounting Standards Board (FASB) is in charge of developing and reviewing the frameworks. Conceptual frameworks have been constantly changed from them. However, individual organizations
The qualitative case study consists of 6 mini focus group each were comprised of between 3-5 participants who are Saudi national car owners of Toyota and its competitors’ car models no older than the year
44 pages (11000 words)Essay
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