Ahmed Ali (CEO of Oman Cotton Company) has recently reported a 100 million OMR. The Oman Tax Authority has informed company management to move toward applying accounting standards as the company profit reached the threshold. He discussed this matter with their public accounting to understand the accounting framework. The Public Accounting (Ernest and Q Company) explained that the accounting framework is a set of criteria used to measure, recognize, present, and disclose the information appearing in an entity's financial statements. Thus, Oman Cotton Company's financial statements must have been constructed using a recognized framework, or else auditors will not issue a clean audit opinion for them. In other words, they will face auditing challenges. The public accounting firms added that the most used accounting frameworks are generally accepted accounting principles (GAAP) and international financial reporting standards (IFRS). These two frameworks are designed to be broad-based and therefore applicable to most types of businesses. However, the CEO seeks your advice for the following before they finally sign the contract with the auditor.

Explain two Principles and two Assumptions and two Constrains with Examples. (10 marks)