Question 1
Accounting standards The accounting standards used by the organization in Australia, to prepare financial report under Corporations Act 2001 s296, are set by the Australian Accounting Standards Board(AASB). The accounting standard contains the matters to be disclosed in the financial statement. All the public and private sectors should apply these accounting standards to prepare the general purpose financial reports. Whenever the general purpose financial report is prepared, presented, audited, reviewed or compiled, it should comply with accounting standards, as according to profession and ethical standard APES 205 Conformity with accounting standard. (archive.treasury.gov.au,2015)
The Australian accounting standard is formed …show more content…
It plays a very vital role to create high quality financial report which satisfy the requirements of their users. It directs the attributes, restrictions and action of the financial accounting and reporting. It helps to understand and interpret the standards.
The foundation of the conceptual framework is formed by the objective of general purpose of financial reporting. The conceptual framework facilitates to make the accounting standards more persistent and reasonable. (Nobes and Standler, 2014)
All organization except small proprietary companies, must prepare financial information. The financial information of the reporting organization enables the existing and potential lenders, investors, and other creditors to make the decision regarding resources distribution to the organization. The one who lacks the ability to enforce the organization to give the information, which influences their investment decisions, are the users, whom the financial reporting is directed. Other than these group of people regulators and members of the public are also the potential users of general purpose financial report, as identified by IASB Conceptual Framework. …show more content…
For the information to be faithful it should possess three characteristics, completeness, neutrality and free from error. The financial information should be complete, in order to achieve its objective. Neutrality is all about fairness and justice and the financial information should not contain any error.
Comparability
This is the enhancing qualitative characteristics of financial information. The financial information included in the financial report should be comparable within the company and across the company. Comparisons within the entity is done within the financial periods. Across the company, comparisons are done to analyze the similarities and/or differences between one or more companies. For the comparison across the organization, the methods of measurement and disclosure must be consistent, but if it is not relevant to the organization circumstances, then it should be changed.
Accounting standards The accounting standards used by the organization in Australia, to prepare financial report under Corporations Act 2001 s296, are set by the Australian Accounting Standards Board(AASB). The accounting standard contains the matters to be disclosed in the financial statement. All the public and private sectors should apply these accounting standards to prepare the general purpose financial reports. Whenever the general purpose financial report is prepared, presented, audited, reviewed or compiled, it should comply with accounting standards, as according to profession and ethical standard APES 205 Conformity with accounting standard. (archive.treasury.gov.au,2015)
The Australian accounting standard is formed …show more content…
It plays a very vital role to create high quality financial report which satisfy the requirements of their users. It directs the attributes, restrictions and action of the financial accounting and reporting. It helps to understand and interpret the standards.
The foundation of the conceptual framework is formed by the objective of general purpose of financial reporting. The conceptual framework facilitates to make the accounting standards more persistent and reasonable. (Nobes and Standler, 2014)
All organization except small proprietary companies, must prepare financial information. The financial information of the reporting organization enables the existing and potential lenders, investors, and other creditors to make the decision regarding resources distribution to the organization. The one who lacks the ability to enforce the organization to give the information, which influences their investment decisions, are the users, whom the financial reporting is directed. Other than these group of people regulators and members of the public are also the potential users of general purpose financial report, as identified by IASB Conceptual Framework. …show more content…
For the information to be faithful it should possess three characteristics, completeness, neutrality and free from error. The financial information should be complete, in order to achieve its objective. Neutrality is all about fairness and justice and the financial information should not contain any error.
Comparability
This is the enhancing qualitative characteristics of financial information. The financial information included in the financial report should be comparable within the company and across the company. Comparisons within the entity is done within the financial periods. Across the company, comparisons are done to analyze the similarities and/or differences between one or more companies. For the comparison across the organization, the methods of measurement and disclosure must be consistent, but if it is not relevant to the organization circumstances, then it should be changed.