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CMA Intermediate · Corporate Accounting and Auditing · Conceptual Framework

A preparer argues that a treatment required by a specific Ind AS should be ignored because it conflicts with the Conceptual Framework's definition of an element. Which response is consistent with the Conceptual Framework's status?

The preparer is wrong. The Conceptual Framework is not an Ind AS, and nothing in it overrides any Ind AS or any requirement in one. Any departure ICAI makes from the Framework is explained in the Appendix to the relevant standard, so the Ind AS treatment must be followed.

  1. ACorrect, because the Conceptual Framework prevails over any Ind AS in case of conflict
  2. BCorrect, provided the auditor agrees to the departure
  3. CIncorrect, because the Conceptual Framework is not an Ind AS and nothing in it overrides any Ind AS or its requirementsCorrect
  4. DIncorrect, because the Framework applies only to entities that have no Ind AS at all

Explanation

Paragraph SP1.2 states the Conceptual Framework is not an Ind AS and nothing in it overrides any Ind AS or requirement in an Ind AS. Where ICAI departs from the Framework, it explains this in the Appendix to the relevant Ind AS. The Framework still helps preparers develop policies when no Ind AS applies or a choice is allowed, so the last option is too narrow.

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