In recent times, investment markets have become universal and continue to enlarge. Moreover, there has been significant globalization of production and trade. Investors can trade shares and securities worldwide. Entities are in a position to access the funds globally in the most profitable markets. For this purpose, investors from all over the world rely upon financial statements before taking financial decisions. They require to be influenced that the financial statements are true and fair and what they understand from the statements is what the person preparing them intends to convey. However, different countries adopt different accounting treatments and disclosure patterns with respect to the same economic affair. This may create confusion among all the users while interpreting the financial statements. In this article, the conceptual framework has been explained in a layman style.