The Accounting Conceptual Framework is a system of interrelated objectives and fundamental principles that guide the development, interpretation, and application of accounting standards. It provides a coherent foundation for consistent and logical financial reporting, ensuring that financial statements are both useful and reliable for a wide range of users, including investors, creditors, and regulators.

The framework outlines the objectives of financial reporting, which primarily focus on providing information that is useful in making economic decisions. It defines the qualitative characteristics of useful financial information, such as relevance, faithful representation, comparability, verifiability, timeliness, and understandability.

Additionally, it establishes the elements of financial statements, such as assets, liabilities, equity, income, and expenses, and the criteria for their recognition and measurement. The framework also addresses underlying assumptions like the accrual basis of accounting and the going concern assumption.

Although the conceptual framework is not a standard in itself, it plays a critical role in guiding standard-setters (e.g., IASB, FASB) when developing or revising accounting standards. It also helps preparers and auditors resolve accounting issues not directly addressed in existing standards. Overall, the Accounting Conceptual Framework promotes consistency, transparency, and accountability in financial reporting.