FA – May 2018 – L1 – SA – Q1 – Scope and Purpose of Accounting

Identifies the purpose of the Conceptual Framework for Financial Reporting.

Question

Which of the following is NOT a purpose of the Conceptual Framework for Financial Reporting?
A. To assist national standard-setting bodies in developing national standards.
B. To assist preparers of financial statements in applying IFRSs and in dealing with topics that have yet to form the subject of an IFRS.
C. To assist auditors in forming an opinion on whether financial statements comply with IFRS.
D. To assist users of financial statements in interpreting the information contained in financial statements prepared in compliance with IFRS.
E. To define standards for measurement or disclosure.

Answer

Explanation:
Option E is the correct answer because the Conceptual Framework does not define standards for measurement or disclosure. It provides guidance for developing standards but does not act as a standard itself. Other options relate to the framework’s purpose in helping users, auditors, preparers, and standard setters understand and apply existing accounting standards.

Tags: Accounting Standards, Conceptual Framework, IFRS
Level: Level 1

Topic: Scope of Management Accounting
Series: MAY 2018

Uploader: Theophilus