LO 1: What is accounting standard and how it differs from conceptual frameworks and

“generally acceptable accounting principles”.

Accounting standards are the outliner of how economic transactions should be recorded,
conducted, analyzed and presented in financial statements. Accounting standards are part
of the accounting conceptual framework, so by scope conceptual framework scale is larger.

Accounting standards are the pathway that allows a better designing process of conceptual
framework. Accounting standards function to encourage and supervise sound financial
system while providing consistency globally. There are two accounting standards; IFRS and
GAAP. The GAAP is practiced mainly in the US, while IFRS is practiced at the rest part of the
world. Conceptual frameworks function to assist the formulation of future standards.