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CA Final · Financial Reporting · Conceptual Framework for Financial Reporting under Indian Accounting Standards (Ind AS)

A finance student is asked to list the ways in which Ind AS based on the Conceptual Framework contribute to the public interest. Which of the following is stated in the text as a contribution?

Ind AS based on the Conceptual Framework strengthen accountability by reducing the information gap between providers of capital and the people to whom they have entrusted their money. They also provide information needed to hold management to account, alongside contributing to transparency and economic efficiency.

  1. AIt strengthens accountability by reducing the information gap between providers of capital and those entrusted with their moneyCorrect
  2. BIt guarantees that every company reports identical profits regardless of its transactions
  3. CIt removes the need for auditors by making all financial information self-verifying
  4. DIt sets the tax rates applied to corporate profits in each jurisdiction

Explanation

The text says Ind AS based on the Framework contribute to transparency, strengthen accountability and contribute to economic efficiency. Accountability is strengthened by reducing the information gap between capital providers and those entrusted with the money, and by providing information to hold management to account. The other options are not stated.

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