Reporting Frameworks

Definition: The accounting standards a set of financials is prepared under (e.g. IFRS, IFRS for SMEs), determining required disclosures and presentation.

Core idea

Every set of financial statements is prepared in conformity with a reporting framework — a body of rules that defines what must be recognised, how it must be measured, and what must be disclosed. The choice of framework is usually determined by regulation (statute, listing rules) or agreement with stakeholders. The framework determines the form and content of the financial statements, the disclosure requirements, and the assurance standard that an auditor or reviewer applies. Draftworx supports multiple frameworks, configuring the correct set of Disclosures and financial statement templates for each engagement automatically.

Key principles

• IFRS (full): issued by the International Accounting Standards Board (IASB); required for listed entities in over 140 jurisdictions. Comprehensive and principle-based; carries the heaviest disclosure burden.
• IFRS for SMEs: a self-contained, simplified standard for private companies without public accountability. Approximately 10 % of the volume of full IFRS. Reviewed and updated on a three-year cycle by the IASB.
• Local GAAP: many jurisdictions have their own standards (US GAAP, UK GAAP / FRS 102, etc.). Draftworx currently focuses on IFRS and IFRS for SMEs markets.
• Framework → disclosures: the selected framework drives the mandatory disclosure checklist. Selecting the wrong framework at engagement setup leads to incomplete or over-disclosed financials.
• Framework → assurance: auditors and reviewers must state which financial reporting framework was applied; the assurance standard they use (ISA, ISRE) is complementary to, not part of, the framework.
• Consistency: entities must apply their chosen framework consistently from period to period; changes in framework require retrospective restatement and prominent disclosure.

Examples

• A South African listed group prepares consolidated financial statements under full IFRS as required by the JSE Listings Requirements.
• A small owner-managed business prepares annual financial statements under IFRS for SMEs because it has no public accountability and the simplified standard reduces compliance cost.
• When a Draftworx practitioner creates an engagement, they select the reporting framework; the platform then populates the Disclosures checklist and financial statement presentation with the correct headings and notes for that framework.

Connections

• Disclosures — the framework prescribes precisely which notes and policies must be disclosed; changing framework changes the disclosure checklist
• Audit vs Review — auditors and reviewers reference the applicable framework in their opinion/conclusion and apply procedures calibrated to its requirements

Source

General accounting knowledge; IFRS Foundation; IASB IFRS for SMEs standard (2015, updated 2019).