Case 4: There had been a group discussion on various aspects related to accounting standards amongst a few fresh graduates. Each graduate had come up with an opinion about the topics that are been discussed below. You are required to review each of the discussion and validate their opinion with required explanation. Also, you need to provide the correct opinion in case you disagree with all the opinions. Each of the given discussion should be commented upon within 75 - 150 words. The question contains 5 discussions. (5x 2 marks = 10 marks) Discussion 1: To make decisions the users assess the management stewardship. How does the Conceptual Framework explain the role of stewardship? Graduate 1 stated that according to the conceptual framework providing information needed to assess management's stewardship is identified as one of the objectives of financial reporting, equal in prominence to providing financial information useful to users in making decisions relating to providing resources to the entity Graduate 2 mentioned that the decisions relating to providing resources to the entity depends on users' assessment of the amount, timing and uncertainty of the prospects for future net cash inflows to the entity and on their assessment of management's stewardship Graduate 3 confirmed that providing information needed to assess stewardship is more important than providing information needed to assess the prospects for future cash inflows to the entity Graduate 4 stated that financial reports are not intended to provide information needed to assess stewardship Discussion 2: IAS 1 is to be applied to all general-purpose financial statements prepared and presented in accordance with International Financial Reporting Standards (IFRSs). And it does not prescribe any format for presentation of general-purpose financial statements but prescribes the minimum disclosures required to be made. Graduate 1 mentioned that IAS 1 is applicable to all types of financial statements and there are formats prescribed for financial statements Graduate 2 mentioned that IAS 1 is applied to all general-purpose financial statements prepared and presented in accordance with IFRS. Moreover, there are formats prescribed that can be used by an entity Graduate 3 stated that IASI is applied to general and special purpose financial statements but there is no prescribed format for presentation of financial statements Graduate 4 completely agreed with graduate 3's opinion. Discussion 3: The Framework describes two types of characteristics for financial information to be useful Fundamental and Enhancing. The graduates were asked to associate neutrality as an ingredient of either fundamental or enhancing quality of information? Graduate 1 mentioned that neutrality is an ingredient of relevance which is an enhancing quality as it provides predictive or confirmatory value to the financial information. Graduate 2 stated that neutrality is an ingredient of consistency as it allows comparability of information between entities or different time periods Graduate 3 confirmed that neutrality to be an ingredient of verifiability as it promotes verification of financial information. Graduate 4 stated that neutrality is neither an ingredient of either fundamental or enhancing quality of financial information. Discussion 4: A statement of compliance with IFRSs is required to be presented in the notes. An entity can claim compliance with IASs if it has not complied with one or more IASs and its financial statements state the fact that the entity complies with LASs, except for compliance with one or more Standards. Graduate 1 totally agreed with the statement given and said that the giving such disclosure able the entity to fulfil the compliance requirement Graduate 2 totally disagreed with the statement but was not able to provide with any explanation towards it. Graduate 3 agreed with the explanation given by graduate 1 Graduate 4 was not able to give any opinion on such statement Discussion 5: Some factors may indicate that recognition of an item meeting the definition of an asset or a liability may not provide relevant information if there is uncertainty about whether an asset or liability exists or low probability of an inflow or outflow of economic benefits or there exists other factors like accounting mismatch. Graduate 1 stated that such statement is valid only if there is uncertainty of such existence of asset or liability Graduate 2 mentioned that statement given above is completely invalid and has nothing to with recognition of asset or liability Graduate 3 said that such statement is completely valid with no errors Graduate 4 stated that such statement is valid on if there is low probability of an inflow or outflow of economic benefits. Case 4: There had been a group discussion on various aspects related to accounting standards amongst a few fresh graduates. Each graduate had come up with an opinion about the topics that are been discussed below. You are required to review each of the discussion and validate their opinion with required explanation. Also, you need to provide the correct opinion in case you disagree with all the opinions. Each of the given discussion should be commented upon within 75 - 150 words. The question contains 5 discussions. (5x 2 marks = 10 marks) Discussion 1: To make decisions the users assess the management stewardship. How does the Conceptual Framework explain the role of stewardship? Graduate 1 stated that according to the conceptual framework providing information needed to assess management's stewardship is identified as one of the objectives of financial reporting, equal in prominence to providing financial information useful to users in making decisions relating to providing resources to the entity Graduate 2 mentioned that the decisions relating to providing resources to the entity depends on users' assessment of the amount, timing and uncertainty of the prospects for future net cash inflows to the entity and on their assessment of management's stewardship Graduate 3 confirmed that providing information needed to assess stewardship is more important than providing information needed to assess the prospects for future cash inflows to the entity Graduate 4 stated that financial reports are not intended to provide information needed to assess stewardship Discussion 2: IAS 1 is to be applied to all general-purpose financial statements prepared and presented in accordance with International Financial Reporting Standards (IFRSs). And it does not prescribe any format for presentation of general-purpose financial statements but prescribes the minimum disclosures required to be made. Graduate 1 mentioned that IAS 1 is applicable to all types of financial statements and there are formats prescribed for financial statements Graduate 2 mentioned that IAS 1 is applied to all general-purpose financial statements prepared and presented in accordance with IFRS. Moreover, there are formats prescribed that can be used by an entity Graduate 3 stated that IASI is applied to general and special purpose financial statements but there is no prescribed format for presentation of financial statements Graduate 4 completely agreed with graduate 3's opinion. Discussion 3: The Framework describes two types of characteristics for financial information to be useful Fundamental and Enhancing. The graduates were asked to associate neutrality as an ingredient of either fundamental or enhancing quality of information? Graduate 1 mentioned that neutrality is an ingredient of relevance which is an enhancing quality as it provides predictive or confirmatory value to the financial information. Graduate 2 stated that neutrality is an ingredient of consistency as it allows comparability of information between entities or different time periods Graduate 3 confirmed that neutrality to be an ingredient of verifiability as it promotes verification of financial information. Graduate 4 stated that neutrality is neither an ingredient of either fundamental or enhancing quality of financial information. Discussion 4: A statement of compliance with IFRSs is required to be presented in the notes. An entity can claim compliance with IASs if it has not complied with one or more IASs and its financial statements state the fact that the entity complies with LASs, except for compliance with one or more Standards. Graduate 1 totally agreed with the statement given and said that the giving such disclosure able the entity to fulfil the compliance requirement Graduate 2 totally disagreed with the statement but was not able to provide with any explanation towards it. Graduate 3 agreed with the explanation given by graduate 1 Graduate 4 was not able to give any opinion on such statement Discussion 5: Some factors may indicate that recognition of an item meeting the definition of an asset or a liability may not provide relevant information if there is uncertainty about whether an asset or liability exists or low probability of an inflow or outflow of economic benefits or there exists other factors like accounting mismatch. Graduate 1 stated that such statement is valid only if there is uncertainty of such existence of asset or liability Graduate 2 mentioned that statement given above is completely invalid and has nothing to with recognition of asset or liability Graduate 3 said that such statement is completely valid with no errors Graduate 4 stated that such statement is valid on if there is low probability of an inflow or outflow of economic benefits