Tuesday, 12 January 2016

Acceptability of Financial Reporting Framework

Acceptability of Financial Reporting Framework

Acceptability of financial reporting framework is determined by the following factors.

1.    Entity Nature

First factor for acceptability of financial reporting framework is nature of entity. Different nature of organization may have different financial framework. Auditor would judge, whether a financial framework is suitable for the entity.

2.    Purpose of Financial Statement

Second important factor for acceptability of financial reporting framework is purpose of financial statement. Ordinarily there are two types of financial statement are prepared i.e. meet the common user need and to meet the specific user needs.

3.    Nature of Financial Statement

Third important factor for acceptability of financial reporting framework is nature of financial statement i.e. whether financial statement consists of a single statement or a complete set of financial statements.

4.    Application of law


Fourth important factor for acceptability of financial reporting framework is application law and regulation.

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