Chat with AIExam 2: A Conceptual Framework: Scope, reporting Entity and the Objective of Financial Report
'General purpose financial reports should meet the information needs of users with only a limited knowledge and understanding of financial matters'.Discuss
(40) 
Answered by Examlex AI CopilotGeneral purpose financial reports are designed to provide information to a wide range of users, including those with limited knowledge and understanding of financial matters. This is because financial reports are used by various stakeholders, such as investors, creditors, employees, and government agencies, who may not have a background in finance or accounting.
To meet the information needs of users with limited financial knowledge, general purpose financial reports should be prepared in a clear and understandable manner. This means using plain language and avoiding technical jargon or complex financial terminology. Additionally, the reports should include explanations and descriptions of key financial concepts and metrics to help users interpret the information presented.
Furthermore, general purpose financial reports should provide a comprehensive overview of the financial performance and position of the reporting entity. This includes information on the company's income, expenses, assets, liabilities, and equity, as well as any significant events or transactions that may impact its financial position.
In summary, general purpose financial reports should be accessible and informative for users with limited financial knowledge, providing them with the necessary information to make informed decisions and understand the financial health of the reporting entity. By meeting the needs of users with varying levels of financial literacy, these reports can effectively serve their intended purpose of communicating the financial performance and position of an organization.
Under APES1 entities that will always be reporting entities and are required to prepare general purpose financial reports include:
(35) 
VerifiedD
In establishing external reporting requirements,the Corporations Act distinguishes between:
(36) VerifiedA
Management must ensure that the information contained in financial statements is presented in such a way that the statements can be understood only by:
(37) Which of these is the least likely to be able to use their influence to obtain special purpose reports to meet their needs for financial information?
(38) A major beneficiary from the development of a conceptual framework is expected to be:
(30) SAC2 defines the objective of general purpose financial reporting as:
(38) The first Australian study on the objective of financial reporting was by:
(43) Distinguish between general purpose and special purpose financial reports.In your answer give examples of each type of report.
(35) Which of these is not one of the major potential benefits of a conceptual framework?
(29) The correct order for the seven levels of the accounting standard-setting part of the conceptual framework is:
(30) The statement concerning general-purpose financial reports that is correct is:
(38) Which of these are identified by SAC2 as major categories of users of general-purpose financial reports?
(43) Under the FASB Statement of Financial Accounting Concepts No.1 the scope of general purpose financial reporting includes all of the following except:
(43) Under SAC2,parties performing a review or oversight functions for general-purpose financial reports would include all of the following,except:
(29) Which factor(s)is/are identified in SAC1 to assist in determining whether an entity has users dependent on general purpose financial reports?
(35) Explain and discuss why,when there was already a large number of accounting standards on issue,accountants decided that they needed a conceptual framework.
(37) 
Filters
- Essay(0)
- Multiple Choice(0)
- Short Answer(0)
- True False(0)
- Matching(0)