Australian Accounting Standard Board (AASB) Tasks 2022

Running Head: FINANCIAL ACCOUNTING THEORY
FINANCIAL ACCOUNTING THEORY
Name of the Student
Name of the University
Author’s Note

FINANCIAL ACCOUNTING THEORY1
Table of Contents
Part A.........................................................................................................................................2
Answer to task 1:....................................................................................................................2
Answer to task 2:....................................................................................................................3
Answer to task 3.....................................................................................................................4
References:.................................................................................................................................6

FINANCIAL ACCOUNTING THEORY2
Part A
Answer to task 1:
The Australian Accounting Standard Board (AASB) is an agency by the Australian
government, which helps in developing and maintaining the financial reporting standards that
are applied to public or private financial institutions, businesses and other entities in
Australia. The AASB conceptual framework consists of six qualitative features of which two
are fundamental and four are enhancing qualities (Baker, 2017). The standard aims at
providing financial information to all stakeholders to assist them in making better financial
decisions. The two qualitative features, which help in achieving the aim of the framework are
Faithful Representation and Relevance.
Relevant information refers to those financial information that have the power to alter,
change or affect the course of action or decision of an individual. Relevance is the fact that
these information have the ability to affect the decision makers. Whereas, Faithful
representation is the characteristic, which refers to those information which can demonstrate
the economic phenomenon faithfully by using a genuine approach (No, 2018). These
information are reliable and are free from any kind of errors. A user or an individual rely on
this information at the time of making any decision that can affect the economy of the
country.
Both the qualitative characteristics of the conceptual framework relevance and faithful
representation are equally important at the time of making an appropriate financial decision.
For initiating an effective application of the framework it is vital that the information is able
to identify all the economic phenomenon and then take into account the relevant ones (No,
2018). To have an unfaithful information on relevant phenomena or a faithful representation
on irrelevant phenomena become equally unusable for the users at the time of decision