Final answer:
The statement is true. A conceptual framework underlying financial accounting is important because it can lead to consistent standards and it prescribes the nature, function, and limits of financial accounting and financial statements.
Step-by-step explanation:
The statement is true. A conceptual framework underlying financial accounting is indeed important because it can lead to consistent standards and it prescribes the nature, function, and limits of financial accounting and financial statements.
A conceptual framework provides a set of principles, concepts, and objectives that guide the development of accounting standards and financial reporting. It helps ensure that financial information is relevant, reliable, and comparable across different organizations and contexts.
For example, the International Financial Reporting Standards (IFRS) and the Generally Accepted Accounting Principles (GAAP) in the United States are both based on conceptual frameworks that outline the fundamental principles and concepts underlying financial accounting.