Management and Organizational Studies 1023A/B Lecture Notes - Lecture 2: Measurement Uncertainty, Retained Earnings, Accounting

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 1023A/B
• Professor: Maria Ferraro

Document Summary

A conceptual framework is like a constitution and is a coherent system of interrelated. Aids in creation standards for the accounting profession. Users trusts companies since there is a standard at which accounting professions follow. Enhances comparability of financial statements of different companies. The framework is the foundation for building a set of accounting concepts and objectives. The framework is a reference of basic accounting theory for solving new and emerging practical problems of reporting. In 1976, fasb issued a three-part document stating the major issues that would need to be addressed in establishing a conceptual framework for setting accounting standards. The 7 statements of financial accounting concepts were published. Levels of conceptual framework: objectives this identifies accounting"s goals and purposes (the building blocks of the conceptual framework, qualitative characteristics make accounting information useful, foundational principles used in establishing and applying accounting standards.