'DEVELOPING CONCEPTUAL FRAMEWORKS ARE A TIME WASTING ACTIVITY'

Masters
Essay
Finance & Accounting
Pages 8 (2008 words)
Download 0
DEVELOPING CONCEPTUAL FRAMEWORKS ARE A TIME WASTING ACTIVITY Contents Contents 2 Introduction 3 Conceptual Framework 4 Financial Accounting Theory 4 Conceptual Framework for Financial Accounting 7 Conclusion 9 References 9 Introduction This paper critically evaluates the conceptual frameworks in the context of financial accounting theories…

Introduction

The financial accounting theory functions on the basis of conceptual framework, explains the observed accounting practices and predicts the unobserved practices. The theoretical framework of accounting evolved significantly in the 20th century following the market crash in 1929 and recent financial crisis. The major accounting theories, developed in 20th century are Efficient Market Hypothesis (EMH), fundamental analysis model, CAPM, positive accounting theory and critical perspective model. These theories were criticised by SATTA (Statement of Accounting Theory & Theory Acceptance) giving the reasons why these theories could not gain general acceptance. The main points of criticism were real world complexity, varying requirements of user groups, and failed interpretation of security price behaviour through EMH, costs of adopting accounting standards more than the benefits and limited capacity of users in assimilation and analysis of accounting information. Further, to understand the implications of conceptual framework example of the joint project of IASB and FASB for the convergence of their respective conceptual frameworks is discussed. ...
Download paper
Not exactly what you need?

Related papers

The US should wasting time and adopt IFRS immediately
The US GAAP is the accounting standard followed by all companies registered in the United States. Doherty (2008) estimates that the US will not be able to adopt the IFRS completely before 2015. As a result, both the FASB (Federal Accounting Standards Board of the US) and the IASB have been working to achieve convergence between the two standards. However, this convergence exercise has been ongoing…
Financial Accounting Theory
The accounting frameworks are there for wide use of the financial statements of a company. A common framework of accounting would certainly be useful for the stakeholders of the company. But the criticism of the conceptual framework arises as these are not found so useful. The arguments are that the frameworks are not useful as there is lacking of practical evidences. The paper is an attempt to…
developing a conceptual framework is an impossible possibility
It fixes a standard of financial accounting which, when followed, ensures consistency in the financial statements of different companies. The financial statements of different companies must be able to satisfy the needs of a variety of users who mostly want to compare one company with another. When a standard is followed by all the companies, the financial statements become reliable for the users…
developing a conceptual framework is an impossible possibility
There have been increasing efforts towards formation of standardized approaches in accounting, in what may be explained to be an accounting conceptual framework. The standardized approach in accounting aims to offering a holistic and uniformed approach in which all accounting problems can be handled. Moreover, such standards help in ensuring ethics and morality in accounting discipline considering…
Developing a conceptual framework is an impossible possibility
Conceptual frameworks have been constantly changed from them. However, individual organizations have come up with their own conceptual frameworks that suit specific organizational needs. A conceptual framework provides an over view of how things should be done in an organization. It is a coherent system of related objectives and fundamentals that should lead to consistent standards that prescribe…
Developing a conceptual framework is an impossible possibility
It works on the determining the basis of theoretical theories, measurement of transactions (e.g. historical value) and their reporting lines to their end users (SA, 2011). Historical View in Conceptual Framework: The sophistication and excessive increase in businesses and accounting disclosures gave birth to the rules and regulations in accounting standards. A generalised approach was established…