WHAT IS YOUR PRINCIPLE
CONCEPTUAL FRAMEWORK
The need for understanding a conceptual framework
Main points
- What is conceptual framework?
- Purposes of a conceptual framework.
- The Absence of a conceptual framework.
- Enron company example.
What is conceptual framework?
- A conceptual framework establishes the concepts that underlie financial reporting.
- A conceptual framework must consider the theoretical and conceptual issues surrounding financial reporting and form a coherent and consistent foundation that will underpin the development of accounting standards.
- The concepts flow from the objectives and they represent a framework of principles underlying financial reporting.