What is an Accounting Framework?

An accounting framework is a published set of criteria that is used to measure, recognize, present, and disclose the information appearing in an entity's financial statements. An organization's financial statements must have been constructed using a recognized framework, or else auditors will not issue a clean audit opinion for them.

The most commonly-used accounting frameworks are generally accepted accounting principles (GAAP) and international financial reporting standards (IFRS). GAAP is used by entities in the United States, while IFRS is used in most other parts of the world. These two frameworks are designed to be broad-based and therefore applicable to most types of businesses. In addition, governmental accounting standards (GAS) are promulgated by the Governmental Accounting Standards Board (GASB), and are used by state and local government entities. There are other accounting frameworks that are designed for special situations, and which are known as other comprehensive bases of accounting (OCBOA).