Chapter 6 - Normative Theory Framework projects

What is the definition of a 'conceptual framework'?

A. A conceptual framework is a set of prescriptions of what accounting should be

B. A conceptual framework is a structured positive theory of accounting.

C. A conceptual framework is a coherent system of objectives and fundamentals that are expected to lead to consistent standards.

D. A conceptual framework is a group of independent concepts on specific accounting issues, that are grouped together to provide a single reference.

What is the purpose of developing a conceptual framework?

A. To provide a coherent structure to accounting practice which had developed in an ad hoc way

B. To guide standard-setters to develop standards based on the same concepts and principles, rather than in a piecemeal approach

C. To guide users where there is no accounting standard covering an issue.

D. All of the given options are correct

The components, or building blocks, in the IASB Framework for the Preparation and Presentation of Financial Statements do not include:

A. The definition of 'financial reporting'

B. Definition of users and their needs

C. Underlying assumptions

D. Accounting standards

Which of the following cannot be concluded from an overview of the history of the development of conceptual framework projects?

A. A number of countries have successfully completed conceptual framework projects

B. Those responsible for them have either been reluctant to promote significant changes, or the changes suggested have not been accepted.

C. Conceptual framework projects have been reluctant to prescribe a particular valuation or measurement approach.

D. The conceptual framework is a continuous and evolving project

Which of the following appears to be most influential in developing the objectives of financial reporting as well as a number of other concepts that have been used as a basis for most conceptual framework projects?

A. Accounting Principles Board (APB) Statement No 4 (1970)

B. The Trueblood Report (1973)

C. The Corporate Report (UK) (1976)

D. The Stamp Report (1980)

Which of the following was particularly concerned with addressing the rights of the community, in terms of access to financial information about entities?

A. Accounting Principles Board (APB) Statement No 4 (1970)

B. The Trueblood Report (1973)

C. The Corporate Report (UK) (1976)

D. The FASB Conceptual Framework Projec

Since 1 January 2005, the Australian Accounting Standards Board's conceptual framework consists of:

A. The IASB's Framework for the Preparation and Presentation of Financial Statements

B. SAC 1: Definition of the Reporting Entity

C. SAC 2: Objectives of General Purpose Financial

D. All of the given options are correct.

On what criteria is a 'reporting entity' , as defined in SAC 1, dependent?

A. Whether there are users that are dependent on the reports to make or evaluate resource decisions

B. Professional judgment providing some guidelines to help make a decision

C. Whether there are users that are dependent on the reports to make or evaluate resource decisions, and professional judgement provides some guidelines to help make a decision

D. The Corporations Law based on measures of gross revenue, dollar value of assets and the number of employees

Which of the following is not regarded as a legitimate user of financial reports according to the IASB Conceptual Framework?

A. Users without some proficiency in financial accounting

B. Recipients of goods and services

C. Special interest groups in the general public

D. All of the given options are correct.

What is the objective of financial reporting, as stated in the IASB Framework for the Preparation and Presentation of Financial Reports, and consistent with the Australian SAC 2: Objectives of Financial Reporting?

A. Stewardship

B. Accountability

C. Decision usefulness

D. All of the given options are correct

Chapter 6 - Normative Theory Framework projects

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