What is the difference between Conceptual frameworks and Accounting Standards?

The conceptual framework is an accounting standard regarding financial statements and the inclusion of assets, liabilities, equity, revenues, and expenditures. This framework is set so that all transactions are handled the same way and to provide standardized information for lenders, investors, and creditors.

The framework is a guide for a company to develop its accounting policies and comply with accounting standards. Accounting standards are a universal set of principles and standards that set the basis of financial accounting policies and practices. When these standards are followed, aided by the conceptual framework as a guide, the financial representation of business is clear and concise.

Accounting is important to businesses, for it keeps tracking of financial information such as assets and losses. There are two key aspects of accounting, which are Conceptual frameworks and Accounting Standards. Conceptual frameworks are flexible. They are important because they help the prepares of financial statements to ensure they follow the regulations designed by the IFRS. This framework helps the auditor prepare a financial statement that is credible. Compared to conceptual frameworks, accounting standards are more rigid. They are used to promote the use of financial systems in local areas. They also give investors access to information that is not public.