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ACCA Applied Knowledge · Financial Accounting · The regulatory framework

Which of the following is a primary reason why the IASB consults widely and publishes drafts for comment before issuing a standard?

The IASB consults widely and publishes drafts so that preparers, users and other affected parties can give input, which improves the quality and legitimacy of the final standard. Consultation does not let entities pick standards, replace national law automatically, or guarantee that the proposals stay unchanged.

  1. ATo gain input from preparers, users and others affected, supporting the standard's legitimacy and qualityCorrect
  2. BTo allow companies to choose which standards apply to them
  3. CTo make sure all national laws are replaced by the standard
  4. DTo guarantee the standard is approved unchanged

Explanation

Consultation ensures views of preparers, users, regulators and others are considered, improving quality and acceptance. It does not let companies select standards, override national law automatically, or guarantee that proposals remain unchanged, as comments often lead to revisions.

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