Identify the benefits that arise from a conceptual framework

Assignment Help Financial Accounting

Reference no: EM132260172

Question 1. One of your friends, Jaedon Anthony presently works in an Accounting Firm and has some questions regarding the theoretical framework in which IFRS is established. He knows that the IASB has attempted to develop a conceptual framework for accounting theory formulation. Yet, Jaedon's supervisors have indicated that these theoretical frameworks have little value in the practical sense (i.e., in the real world).

Jaedon did notice that accounting rules seem to be established after the fact rather than before. He thought this indicated a lack of theory structure but never really questioned the process at school because he was too busy doing the homework. Jaedon feels that some of his anxiety about accounting theory and accounting semantics could be alleviated by identifying the basic concepts and definitions accepted by the profession and considering them in light of his current work. By doing this, he hopes to develop an appropriate connection between theory and practice.

Instructions:

(a) Help Jaedon recognize the purpose of a conceptual framework.
(b) Identify the benefits that arise from a conceptual framework.

Question 2. The chairman of the board of directors of the company for which you are chief accountant has told you that he has little use for accounting figures based on historical cost. He believes that fair values are of far more significance to the board of directors than "out-of-date costs."

Present some arguments to convince him that accounting data should still be based on historical cost.

Question 3. The article below which was written by Steven Jackson, Business Reporter, appeared in the Business Gleaner of April 18, 2012. Several issues were raised in the article arising from the criticism of the External Auditor, Ernst & Young about Carib Cement's inclusion of future sales in its financial statements.

Arising from the Auditor's criticism, identify and explain the objectives of three (3) accounting standards that have been alluded to.

Article - Auditors clash with Carib Cement over future sales

Attachment:- Auditors clash with Carib Cement over future sales.rar

Reference no: EM132260172

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