The Conceptual Framework for Financial Reporting sets and discusses the objective and fundamentals that serve as the basis for developing financial

The Conceptual Framework for Financial Reporting sets and discusses the objective and

fundamentals that serve as the basis for developing financial accounting and reporting

standards in different countries. The fundamentals are the underlying concepts of financial

accounting that guide the selection of transactions, events, and circumstances to be accounted

for; their recognition and measurement; and the means of summarizing and communicating

them to interested parties. The objective identifies the purpose of financial reporting.

Required:

a Identify and discuss the benefits that can be expected to be derived from the

Conceptual Framework.

(6 marks)

b What is the most important quality for accounting information as identified

in the Conceptual Framework? Explain why it is the most important.

(4 marks)

c Briefly discuss the importance of any five of the fundamental qualitative

characteristics or enhancing qualities of accounting information.

(10 marks)

d 'The IASB and the US Financial Accounting Standards Board (FASB) have

been working together since 2002 to achieve convergence of IFRSs and US

generally accepted accounting principles (GAAP).'

Until recently, the convergence project is not finished.

Explain why the development process of international accounting

harmonization is difficult and complex. You may refer to the following for

further information.