How Does the Conceptual Framework Differ from an Accounting Standard

question 2

Multiple Choice

How does the Conceptual Framework differ from an accounting standard?

• A)The principles in the Conceptual Framework are designed to provide guidance and apply to a limited range of decisions relating to the preparation of financial reports while accounting standards apply to a wider range of decisions relating to the preparation of financial reports.
• B)The principles in the Conceptual Framework are specific in nature while accounting standards provide more general requirements for financial reporting.
• C)The principles in the Conceptual Framework are general concepts while accounting standards provide specific requirements for a particular area of financial reporting.
• D)The principles in the Conceptual Framework provide specific requirements for a particular area of financial reporting while accounting standards are designed to provide general guidance.

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Definitions:

Permanent Resident

An individual who has been granted the legal right to live indefinitely within a country other than their nationality.

Issuer

An entity that develops, registers, and sells securities to finance its operations, such as corporations or governmental bodies issuing bonds or stocks.

Sarbanes-Oxley Act

The Sarbanes-Oxley Act is a United States federal law that set new or expanded requirements for all U.S. public company boards, management, and public accounting firms, aiming to protect investors from fraudulent financial reporting.

Securities Regulations

Securities regulations are laws and rules designed to govern the trading, offering, and sale of securities to protect investors and ensure the fair functioning of securities markets.