Skip to content

CMA Intermediate · Financial Accounting · Introduction to Accounting Standards (GAAP, AS and Convergence to Ind AS)

Which statement about the ICAI Framework for the Preparation and Presentation of Financial Statements is correct where the Framework conflicts with an Accounting Standard?

Where the Framework conflicts with an Accounting Standard, the Accounting Standard prevails. The Framework only sets out underlying concepts and guides the Board in developing future Standards, so such conflicts are limited and are expected to diminish over time.

  1. AThe Framework prevails because it states the underlying concepts
  2. BThe Accounting Standard prevails over the FrameworkCorrect
  3. CThe entity may choose whichever it prefers
  4. DThe auditor decides which one prevails in each case

Explanation

The Framework records that in a limited number of cases there may be a conflict between it and an Accounting Standard. In such cases the requirements of the Accounting Standard prevail. The Board is guided by the Framework when developing or reviewing Standards, so conflicts should diminish over time.

Did you get it right without looking?

One question tells you little. A timed set on Introduction to Accounting Standards (GAAP, AS and Convergence to Ind AS) shows your real accuracy, how long you take and where you lose marks.

Practise Introduction to Accounting Standards (GAAP, AS and Convergence to Ind AS)Free diagnostic mock

More Introduction to Accounting Standards (GAAP, AS and Convergence to Ind AS) questions