"Conceptual frameworkUSERS OF FINANCIAL INFORMATIONinvestors public employees Entity suppliers and othertradelenders creditors customers ? OWNERS – The owners of the company need financial information to know how theirmanagers are efficiently working. Owners need financial information to make validjudgements about the loss incurred and the risk involved in the company. Shareholdersare known as the second owners of the company, they need to get the financialinformation to pay them a share of dividend.The same technique is applied to thepotential shareholders. 3 Conceptual framework? EMPLOYEES – Employees are interested in the company’s information about thesustainability of their perspective employees.They also need detailsto see the ability ofthe company to provide remuneration to employees, benefits from retirements andemployment opportunities. Employees are always show their keen interest in thefinancial position of the company as they get the remuneration, bonus and other typesof incentive only if the company work hard on this. ? LENDERS - lenders are those who give money to any person or entity. Banks needfinancial of the company to whom they gave money to know if there are in position toreturn the money or not. Banks or any other financial institutions are the main lenderswho give loan to the large number of the people. ? Suppliers – Trade creditors and suppliers need information if the amount they owned tothe company will be paid on time. Suppliers are dependent upon the continuity of theentity so they get interested in the financial position of the company.? Customers – Customers need to know financial position of the company when theyhave some sort of long time involvement in the company. Customer also interested inbecause they are the only one who will work for the company in one or other way.(Giggler & Hemmer, 2011).QUESTION 2 How the conceptual framework revision to include Prudence is likely to address The disparity in Corporate Reporting is a requirement in your analysis. ANSWER Prudence is a belief, if not the most of, The International Financing ReportingStandards (IFRS) but it is controversial forever. The conceptual framework includes prudencewith the neutrality as a desirable feature of the financial reporting.Prudence has become a4 Conceptual frameworkglobal issue like whether an international financial report adds prudence or not.There is adifference between the prudence and neutrality. Accounting transaction and other accountingevents are uncertain but to make it relevant company have to make it more realistic andprudent. So, prudent is one of the accounting principles that provide ensure that the assets andliabilities are not overrated or underrated. . Conceptual framework helps in the developmentand enhancement of the accounting standards. External factors such as social, economic,political factors influenced the accounting standards. The conceptual framework is alwaysconcerned with making of financial reports including consolidated reports of the company.Financial statements are always prepared annually and which is directed towards the financialinformation towards the various things. There is a difference between the prudence andneutrality. Accounting transaction and other accounting events are uncertain but to make itrelevant company have to make it more realistic and prudent.For Example: Bad Debtors are predictable in many types of firms, so we have to make contraentry to the account receivable called bad debts which increase the amount receivable accountwhich is need to be come in front and also prevent overstated assets. An expense is also knownas bad debtors expense which stopsnet income from being over rated. The Prudence concept is more likely as a principle of conservatism. It is the principle ofaccounting that prescribed an accountant to take care of the liabilities and expenses as theybegin to come, but revenues comes only when they are actually realize by the company.Theprudence concept mandates the staff to be careful for adaption of the policies and procedure inthe way that the entity income and assets are rated properly. Companies should not meant to5 "