The 2018 IASB Conceptual Framework (Section 3. 7) has significant effects on how financial reporting is implemented.
Question:
The 2018 IASB Conceptual Framework (Section 3. 7) has significant effects on how financial reporting is implemented.
Required
a. The Framework drops the word "rational" as a description of investor and creditor decision-making. This description appeared in the original 1978 FASB Statement of Financial Accounting Concepts. Instead, in the 2018 Framework, the objective of financial reporting is to help financial statement users "in making decisions relating to providing resources to the entity." (CF para. 1.2) Why do you think the word "rational" has been dropped?
b. If investors do not make rational decisions, does this increase or decrease the role of financial reporting in providing useful information to investors? Explain.
c. The 2018 Framework also states that financial statement users need information about "future cash flows" from their investments. Thus, some linkage between current financial statement information and future cash flows is needed. The concept of an information system provides such a linkage. What are the effects of relevance and reliability of financial information on the main diagonal probabilities of the in formation system? Why do these desirable qualities have to be traded off when conditions are not ideal? Define "relevance" and "reliability" as part of your answer.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 75% (8 reviews)
a The word rational may have been dropped due to the theory and evidence from behavioural finance which suggests that investors on average are not ful...View the full answer
Answered By
Ashington Waweru
I am a lecturer, research writer and also a qualified financial analyst and accountant. I am qualified and articulate in many disciplines including English, Accounting, Finance, Quantitative spreadsheet analysis, Economics, and Statistics. I am an expert with sixteen years of experience in online industry-related work. I have a master's in business administration and a bachelor’s degree in education, accounting, and economics options.
I am a writer and proofreading expert with sixteen years of experience in online writing, proofreading, and text editing. I have vast knowledge and experience in writing techniques and styles such as APA, ASA, MLA, Chicago, Turabian, IEEE, and many others.
I am also an online blogger and research writer with sixteen years of writing and proofreading articles and reports. I have written many scripts and articles for blogs, and I also specialize in search engine
I have sixteen years of experience in Excel data entry, Excel data analysis, R-studio quantitative analysis, SPSS quantitative analysis, research writing, and proofreading articles and reports. I will deliver the highest quality online and offline Excel, R, SPSS, and other spreadsheet solutions within your operational deadlines. I have also compiled many original Excel quantitative and text spreadsheets which solve client’s problems in my research writing career.
I have extensive enterprise resource planning accounting, financial modeling, financial reporting, and company analysis: customer relationship management, enterprise resource planning, financial accounting projects, and corporate finance.
I am articulate in psychology, engineering, nursing, counseling, project management, accounting, finance, quantitative spreadsheet analysis, statistical and economic analysis, among many other industry fields and academic disciplines. I work to solve problems and provide accurate and credible solutions and research reports in all industries in the global economy.
I have taught and conducted masters and Ph.D. thesis research for specialists in Quantitative finance, Financial Accounting, Actuarial science, Macroeconomics, Microeconomics, Risk Management, Managerial Economics, Engineering Economics, Financial economics, Taxation and many other disciplines including water engineering, psychology, e-commerce, mechanical engineering, leadership and many others.
I have developed many courses on online websites like Teachable and Thinkific. I also developed an accounting reporting automation software project for Utafiti sacco located at ILRI Uthiru Kenya when I was working there in year 2001.
I am a mature, self-motivated worker who delivers high-quality, on-time reports which solve client’s problems accurately.
I have written many academic and professional industry research papers and tutored many clients from college to university undergraduate, master's and Ph.D. students, and corporate professionals. I anticipate your hiring me.
I know I will deliver the highest quality work you will find anywhere to award me your project work. Please note that I am looking for a long-term work relationship with you. I look forward to you delivering the best service to you.