概念框架通常描述财务系统的报告结构。它用于解决会计系统中数据质量的标准化问题。报告方面得到了清晰的定义。根据Lynch ‘ s 1998，它可以被描述为账户中不同相关方面的中介，它指定了金融系统的类型和因素，也有助于建立一个合适的报表。它由机构间常设委员会于1989年颁布，确定了国内和国际金融体系的标准化。它也被认为是一个有用的工具，当审计人员面对不同的问题，在财务会计的质量方面。概念框架涉及财务会计的原因如下:
According to the IAS37 a liability of uncertain timing or amount is referred to as a provision. The organization is very much likely to pay the amount however the time is not certain as it can be any time before 2019. Hence to arrive at the present value the same needs to be discounted using the appropriate rate of discount. Hence the organization would be required to record a liability of £61471.21 as replacement however currently a liability of £90000 needs to be recorded (IAS, 2016).
“The objective of the Conceptual Framework project is to improve financial reporting by providing a more complete, clear and updated set of concepts. To achieve this, the IASB is building on the existing Conceptual Framework—updating it, improving it and filling in the gaps instead of fundamentally reconsidering all aspects of the Conceptual Framework” (IASB, 2016).
The conceptual framework usually describes the reporting structure of financial system. It uses to fix the standardization of data quality in accounting system. The reporting aspects are clearly defined. As per Lynch’1998, it could be described as the inter-mediate of different co-related aspects in accounts which specifies the types and factors of financial systems and also helps to build up a proper statement. It had been issued by IASC in 1989 determining the standardization of domestic and international financial system as well. It is also considered as a useful tool to the auditors when they face different issues in terms of quality aspects in financial accounting. The causes for what the conceptual framework has been implicated to financial accounting are as follows:
Quality and standard of financial system should have a benchmark.
Various issues and gaps of financial accounting system could be covered up with this financial tool.
It helps to stop the repetition of accounting principles in financial systems in terms of standardization.
framework completes all the expected motives of accounting statements. Although the conceptual framework is consisted of all the combined reports still it is considered as a useful one in case of special accounting statements. It uses to cover all the accounting state statements of trading and organizational aspects whether it could be from government or any private segments. The statements should be so specific and data oriented that it could gain the reliability of account holders in regards to accounting functions.