ACCOUNTING

Accounting

Accounting

Introduction

An accounting conceptual framework can be defined as:

“A coherent system of inter-related objectives and fundamentals that should lead to consistent standards that prescribe the nature, function and limits of financial accounting and financial statements.” (Lynch, 1998, 225)

Discussion

The main reasons for developing an agreed conceptual framework are that it provides: (Black, 1999)

A framework for setting accounting standards;

A basis for resolving accounting disputes;

Fundamental principles which then do not have to be repeated in accounting standards.

Purpose and scope of the Statement of Principles

The purpose of the draft Statement of Principles is to define the principles that should underlie the ...