Management and Organizational Studies 1023A/B Lecture 2: chaper 2 mos

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

Document Summary

Financial statements: conceptual framework is like a constitution; it is a coherent system of interrelated objectives and fundamentals that can lead to consistent standards. Standard setting should build on an established body of concepts and objectives. A framework increases financial statement user"s understanding of and confidence in financial reporting. It enhances the comparability of different companies financial statements. The existing framework of basic theory should be possible to solve new and emerging practical problems more quickly. It should solve complex problem by using good judgment, and with the help of a universally accepted conceptual framework. 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: objective of financial reporting: is to communicate information that is useful to investors, creditors, and other users. Financial information is useful in making decisions about how to allocate resources.