Financial Reporting & Analysis - Coursework Example

By The of the The of the School The and where it is located The Financial Reporting & Analysis The conceptual framework has been criticized for not satisfying its purposeful roles. The primary roles of the conceptual framework are mainly to provide guidance and entailed standard setting and resolution of the accounting controversies. The Conceptual Framework which mainly referred to as The IASB Conceptual Framework for Financial Reporting elaborates on the main typical concepts that underlie and underpins the design and preparation of statements. With reference to (Hines, 1980), the reserved role of underpinning conceptual framework lay in the relationship between financial accounting and entailed economic reality that should be unidirectional. It further should acknowledge reflecting or even faithfully presenting relationship that presupposes that main typical economic reality exists objectively (Gaffikin, Dagwell & Wines, 2014, p62). The evaluation of whether the criticism leveled on the conceptual framework for failing to fulfill its main objective depends on outlining the main objectives of conceptual framework and comparison with what is undertaken in the field by the practice. The analysis depends on actualizing that the conceptual framework financial accounting concurrently reflects, represents, mirrors, or measures the normal feature of the pre-existent economic reality. The conceptual framework can further be analyzed in terms of the evaluating the accounting principles, inherent concepts and enhanced or entailed focus of general function financial reporting elaborated on the Conceptual framework. The main idea behind the introduction and development of the conceptual framework lies in the provision of the structure for creating accounting standards that act as the main or sole center for resolving emergent accounting disputes. The position refers to the typical center for the inherent or fundamental sector for which should not be repeated in entailed accounting standards. The main hot and recurrent components questioned by the critics of the conceptual framework are derived from the internally and various definitions that are poorly constructed. The encountered criticism is important since prior conformity will positively lead to mechanical decision making aimed at controlling the structure (Gaffikin, Dagwell & Wines, 2014, p67). Normally the typical criticism derives from the entailed earlier recognizable ontological and epistemological hypothetical process. The sole role of accounting is very subjective and inclusive since the accountants are strongly related to it, for instance, accountants are hugely instrumental in the selection of the accounting methods and subsequently spreading the techniques. There is a great threat of failure by the conceptual framework by failing to consider the economic reality and featuring hugely on the other minor or relatively uneconomic procedures. Noting the strange challenge in the accounting field conceptual framework has to adopt a situation-specific and subsequent problem-solving approach to tackling effectively the inherent challenges in the society. The actualization of whether the conceptual framework has achieved its targeted aims can only be notable after gauging the essence of rules outlined in the spirit economic enhancement and reality. Concurrently, It is notable that accounting is a relatively biased perception as in most cases it is usually based on the dominant group’ values which are mainly from the accounting professionals (Gore, 2012, p341). The ideal role of the Conceptual framework is normally to ensure increased regulation and more ethical bound with increased relevance to the conceptual framework demands. The Conceptual framework boasts of Having A financial reporting which is basic and inherent concept that forms the foundation or the notable block for financial accounting and reporting. Conceptual framework has provided avenues for leakages and huge losses thus prompting a re-evaluation of the Conceptual framework contents which spearheads the poor practice which threatens the investment process or financial and auditing process. Recurrently, virtually all the national or international accounting standards designed Frameworks have the principals, categorization of administration accounting practices and concepts which are aimed at increasing the eminence of the unit (Gore, 2012, p371). The current conceptual framework apart from failing to achieve the economic basis, it has further prompted the establishment of the overly rules-based system. The Financial Accounting Standards Board has in the past admitted of the insufficiency of the current conceptual framework as having some inadequate features especially with regards to creating current accounting standards. The targets of the conceptual framework cannot be achieved provided the system remains as it since vigorous structures need to be placed in place for enabling effective work of the conceptual frameworks. In its notable that an overly rules-based outline usually generates an enhanced prospect for companies to timely structure and subsequently record every business transactions which fail to authentically reflect the genuine fundamental economic substance (Gaffikin, Dagwell & Wines, 2014, p68). In an absence of the robust principles-based structure in place, FASB would be recurrently faced with fewer options call for implementation of the rules-based accounting standards. The move is targeted for creation of a force a fit eminent in the standards and established conceptual framework that had not been completely developed earlier. The outlined standards normally create, present and pose a peculiar dilemma for most accounting professionals since they normally have to choose between a typical accounting set of regulations and rules to apply best while theoretically sound accounting standard. The availed choice of selection hugely contribute to the less enlightening or deceptive financial statements as most firms normally undertake certain structuring accounting dealings that assemble the inherent letter instead of real intent of GAAP (Kolitz, Quinn & Mcallister, 2009, p569). To avert the current limiting situation, it is highly desirable to create and present and developed conceptual framework that is well raised for tackling new challenges consistent with principles-based on the derived accounting standards (Alexander & Archer, 2014, p934). The similar frameworks are only possible in the scenario where the framework do not apply to serve as inherent guideposts aimed at aiding accounting standard setters but rather aims at facilitating the vital convergence and intertwined working of the U.S. GAAP and also IFRS. While various claims have raised regarding the conceptual framework, there have never been conducted  or an empirical confirmation or even entailed evidence aimed at supporting the claims. The analysis of whether conceptual framework is a recommendable for use hence depends on the consideration of the empirical examination of the individual’s main intentions while using or relying on financial statements with the intention of determining the entrenched qualitative characteristics convenient for the accounting information. This system presses for increased reliance and consideration on the financial statements while dealing with this matter (Financial Accounting Standards Board. 2014, p98). The analysis of the conceptual framework basing from a users standpoint is imperatively vital for the objective of enhanced financial reporting which is to provide the inherent purposeful to aid in timely decision making (Kolitz, Quinn & Mcallister, 2009, p562). The investigation is critically based on the qualitative characteristics and traits of the framework and exactly according the relevance of the backbone that forms the source of every accounting standard. Following the analysis of the conceptual framework and consequent elevated financial statement the users’ original and undoubted intentions can well be revealed with entailed consideration of the inherent context (Stickney, 2014, p341). According to the Theory of Planned Behavior , there is concrete evidence showing research results and findings that are indicative and illustrative which can be entailed while determining a person’s main individuals intentions to execute a behavior. This model is only possible through evaluation and analysis of their attitude, perceived behavioral management and subjective norms (Financial Accounting Standards Board. 2014, p79). The recognition of the conceptual framework of entailed theory of planned behavior is highly relevant in determining of an individual’s predisposition to timely rely on advanced accounting financial statements. Contemporary changes desirable for the re-ignition of the conceptual framework lies in the Theory of Planned Behavior that helps in the Prediction of a positive relation found in a person’s main intention s and subsequent performance of the a specific behavior. There concept should be designed to encourage the urge for the increased reliance on the financial statement (Stickney, 2014, p349). Normally, as the urge rises then there will be resultant stressing on the decision making process by the use of the statement that is highly relevant for the Theory of Planned Behavior. The absence economic reality presented by the earlier use of conceptual framework is highly acknowledged in poor structure in the system (Alexander & Archer, 2014, p134). In conclusion, the criticism of conceptual framework for being a failure and not satisfying its purposeful roles is hence notable and real. Lack of certain rules in the frameworks denies the essential regards desired for control of the professional. The framework hence requires a streamlined approach aimed to mend the framework that would create a real economic approach that is healthy for the accounting profession in entirety (Financial Accounting Standards Board. 2014, p78). The success of the conceptual framework can be traced to the association of the qualitative characteristics that are notable on the accounting information which equally are associated with an individuals placed intention to factor in great reliance on the financial statements. The proper application and use of the qualitative characteristics for the accounting purpose helps in enhancement of the accounting information that are highly important in representing the important attitude measurement dimension directed at creating or even determining individuals main intention. Bibliography Financial Accounting Standards Board. (2013). The Financial Accounting Standards Boards Conceptual Framework For Financial Accounting And Reporting - What Does It Mean? New York, N.Y., Peat, Marwick, Mitchell & Co. Mourik, C. V. (2013). Globalisation And The Role Of Financial Accounting Information In Japan = Globalisatie En De Rol Van Financial Accounting Informatie In Japan. [Amsterdam], Thela Thesis. Alexander, David, & Archer, Simon. (2014). International Accounting/Financial Reporting Standards Guide 2009. Chicago, Cch. Financial Accounting Standards Board. (2014). An Analysis Of Issues Related To Conceptual Framework For Financial Accounting And Reporting: Elements Of Financial Statements And Their Measurement. Stamford, Conn, Financial Accounting Standards Board. International Accounting Standards Board, & Financial Accounting Standards Board. (2014). Exposure Draft Of An Improved Conceptual Framework For Financial Reporting: [And], Discussion Paper : Preliminary Views On An Improved Conceptual Framework For Financial Reporting : The Reporting Entity. London, International Accounting Standards Board. Gore, P. (2012). The Fasb Conceptual Framework Project 1973-1985 : An Analysis. Manchester, Angleterre, Manchester University Press. Stickney, C. P. (2014). Financial Accounting: An Introduction To Concepts, Methods, And Uses. Mason, Oh, South-Western/Cengage Learning. Folpe, H. K. (2014). An Analysis Of Issues Related To Conceptual Framework For Financial Accounting And Reporting: Objectives Of Financial Reporting By Nonbusiness Organizations. Stamford, Ct, Financial Accounting Standards Board. Kolitz, D. L., Quinn, A. B., & Mcallister, G. (2009). A Concepts-Based Introduction To Financial Accounting. Lansdowne, Juta. Gaffikin, M. J. R., Dagwell, R., & Wines, G. L. (2014). Corporate accounting in Australia. Sydney, UNSW Press. Read More