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Questions and Answers
Which of the following is true about conceptual frameworks in financial accounting?
Which of the following is true about conceptual frameworks in financial accounting?
- They are not used in financial accounting principles. (correct)
- The IASB has not published a new version of its conceptual framework.
- They are accounting standards used by regulators, auditors, and accountants.
- There is only one framework used worldwide
What is the objective of the IFRS framework according to the text?
What is the objective of the IFRS framework according to the text?
- To provide useful information to a wide range of user groups, with customers prioritized
- To provide useful information to a wide range of user groups, with shareholders and lenders prioritized (correct)
- To provide useful information to a wide range of user groups, with suppliers prioritized
- To provide useful information to a wide range of user groups, with employees prioritized
Which of the following is not a qualitative characteristic of the IFRS framework?
Which of the following is not a qualitative characteristic of the IFRS framework?
- Consistency (correct)
- Verifiability
- Relevance
- Materiality
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Study Notes
- A conceptual framework guides financial accounting principles for regulators, auditors, and accountants.
- It is not an accounting standard, but there are several frameworks around the world.
- The IFRS framework is the one referred to in this module.
- Standards should be updated to align with a new or updated conceptual framework over time.
- Multiple frameworks can cause conflict and inconsistency, undermining comparability of financial statements.
- The IASB has published a new version of its conceptual framework with 8 principal areas within scope.
- The objective is to provide useful information to a wide range of user groups, with shareholders and lenders prioritized.
- Qualitative characteristics include verifiability and materiality.
- The framework sets out primary financial statements and key principles of preparation.
- Assets, liabilities, equity, income, and expenses are defined, with dividends not considered an expense.
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