Chapter 3
The Accounting Framework
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The basic principles of the accounting framework are revenue recognition, expense recogni-
tion, consistency, materiality, time period concept, and disclosure.
Illustrate the similarities and differences between ASPE and IFRS
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Both ASPE and IFRS are principles-based standards used in Canada.Many of the principles
in the two sets of standards are very similar.
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ASPE requires fewer disclosures and is used only in Canada. Private enterprises in Canada
have a choice whether to use ASPE or IFRS.
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IFRS has more disclosure requirements and is used globally. Public enterprises are required
to use IFRS.
Explain the importance of ethics in accounting
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Accountants must adhere to a high standard of ethics to ensure that the financial information
of a business is accurately reported.
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All of a business’ users rely on this information to make decisions.
