Which of the following best describes why a conceptual framework is necessary?
A) to build all standards and rules upon a common foundation and increase financial statement users' understanding and confidence
B) to make financial statement preparation an automated process requiring no human intervention
C) to completely eliminate the potential for companies to exercise professional judgement in preparation of financial information
D) to decrease the comparability of different companies' financial statements

Question

Quizplus · Accepted Answer

A conceptual framework provides a common foundation for financial accounting standards, which increases users' understanding and confidence in financial statements. It does not aim to eliminate professional judgement or decrease comparability between companies' financial statements.

Which of the Following Best Describes Why a Conceptual Framework