Importance Of Conceptual Framework In Accounting

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Essay The Financial Accounting Standards Boards (FASB) defined conceptual framework as a consistent of underlying concepts and the ideas that describe the nature and general purpose of financial reporting which may lead to consistent standard in accounting (Deegan 2010). The role of the conceptual framework is to ensure that financial statements in accounting are free from bias and to provide useful information that is useful for user’s decision making. The standard-setting board also formulated a range of perceptions and theories related to accounting to trigger the objectives of financial reporting. The standard-setting board keeps issuing the conceptual framework over time to ensure that the conceptual framework’s objectives are improving to provide useful financial information. The innovative work on conceptual framework was embraced in the United States by the FASB in the early 1970s. The FASB accomplished disappointment in attempting to generate a standard that at the outset might not appear to present, especially testing theoretical issues. Regardless, while attempting to achieve concession on Statement of Financial Accounting Standard, tending to the theoretical issues produced critical matter for the board members. In this manner, throughout the outset the FASB understood the requirement for an obvious conceptual framework. Based on Hines’s argument, the conceptual framework is mean to provide the ability to increase self-regulate of a profession in order to neutralizing government interference from arising. Whether this argument has been accepted or not will be discussed in more detail with supported evidence to clarify the main point about Hines’s argument. Further details about this argument will discuss below. In ord... ... middle of paper ... ... FASB face challenges in pursuit of joint conceptual framework’, Journal of International Financial Management & Accounting, vol. 18, issue. 1, pp. 39-51, Wiley Online Library Database, viewed 28 April 2014, DOI 10.1111/j.1467-646x.2007.01007.x Mozes, HA 2002, ‘The FASB’s conceptual framework and political support: the lesson from employee stock options’, A Journal of Accounting, Finance and Business Studies, vol. 34, issue. 2, pp. 141-161, viewed 30 April 2014, Wiley Online Library Database, DOI 10/1111/1467-6281.00027 Paul, B & Miller, W 1985, ‘The conceptual framework: myths and realities’, Journal of Accountancy, vol. 159, issue. 3, p. 62, ProQuest Central Database, viewed 30 April 2014 Peasnell, KV 1982, ‘The function of a conceptual framework for corporate financial reporting’, Accounting & Business Research, vol. 12, issue. 48, pp. 243-256, viewed 05 May 2014
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