FAR 1 - M1 Standards and Conceptual Framework

Question 1

Who are the primary users of financial reports?

Answer 1

Investors
Lenders
Creditors

Question 2

What are the qualitative characteristics of financial reporting?

Answer 2

Relevance
- helps users to make decisions
- Predictive Value - predict future outcomes
- Confirmatory Value - provides feedback about
evaluations previously made by users
- Materiality

Faithful Representation

- Complete
- Neutral
- Free from material error

Question 3

How are qualitative characteristics enhanced?

Answer 3

Comparability - similar info from other time periods
Verifiability -
Timeliness
Understanding

Question 4

changes to existing authoritative GAAP

Answer 4

Accounting Standards Update