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 that fraud and dishonesty are the main vices affecting the economic discipline as people undertake such economic roles with selfish interests, eroding the integrity of such a profession. Knowledge regarding elements and aspects of accounting and the image created by such profession are thus of critical importance in accounting. Knowledge and Sources of Knowledge Epistemology is the discipline concerned with the theory of knowledge and the way people can attain knowledge. In most cases, sentences are only used to convey meaning, and the meaning itself does not reside in sentences. A proposition is the main element in a sentence as it refers to the meaning of a sentence, and it is the one that leads to knowledge. In accounting, knowledge can be gained from a diversity of sources. Knowledge may be attained through skills in doing something. An accountant who spends most of the time preparing financial statement will develop skills in the practice and this would lead to more detailed knowledge than other accountants in a separate department. This involves the act of “knowing how” to do something. Moreover, such knowledge may be genetically programmed in that some people are born with talents and have much higher proficiency in carrying out specific tasks. Knowledge may also be obtained through acquaintance with something or observing something until one grasps the basic concepts in doing it. For example, as person can observe the basic operation of balancing a balance sheet, or any other financial statement over time till they grasp the basic concepts of performing such a task even without formal education on how to do it. Many people in on-job training learn through acquaintance till they develop such skills and are able to perform as required. Knowledge may also be obtained through understanding statements in an inductive reasoning approach. For example, one may gain knowledge by first appreciating the fact that a financial statement has to convey the truth about a company. Therefore, one has to develop a belief regarding the truth conveyed in such a financial statement, and then look for some good facts as evidence to prove the belief is true. However, it must be recalled that truth has to remain as truth despite one knowing it or not, and is not influenced with such inductive reasoning. Knowledge and truth are thus independent of one another and one requires deeper investigation to determine if such knowledge really leads to reality or truth. Accounting Theories Hendrickson (1970) defines a theory as a set of coherent hypothetical, pragmatic and conceptual principles that guide in the field of inquiry (as cited in Deegan and Unerman, 2009). The use of the word coherence indicates that all the elements in a theory have to work together in presenting a certain knowledge, or result in accounting. However, Deegan and Unerman (2009) noted that theories
DEVELOPING A CONCEPTUAL FRAMEWORK IS AN IMPOSSIBLE POSSIBILITY: FINANCIAL ACCOUNTING STATEMENTS BY PRESENTED TO: DATE: It is Impossible to Develop a Conceptual Framework in Accounting Introduction In every business entity, there is a growing need to develop financial statements to facilitate measurement of performance in ensuring the company is in line with its goals and objectives, as well as identifying the business position in the competitive market…
As the discussion stresses and discusses conceptual framework attempts to harmonize the various ideas and concepts of different accountants and even of the accounting bodies. It fixes a standard of financial accounting which, when followed, ensures consistency in the financial statements of different companies.
The conceptual framework provides guidance on the boundaries of financial accounting and other events related to it. The accounting conceptual framework was developed as early as 1970s. The Financial Accounting Standards Board (FASB) is in charge of developing and reviewing the frameworks.
It is the main persistence behind the development of accounting principles. The framework act as a backbone to the US based accounting standard GAAP (Generally Accepted Accounting Principles) for evaluation of existing and new development in accounting standards.
(Alexander, Britton and Jorissen, 2005)
Besides, the application of accounting standards is very different among the many nations of the world. For example, in the United Kingdom the ASB sets used the foundation for accounting needs for the rest of the public segment are also applied to both business and non business fields in the private sector.
The determination of conceptual framework projects' success parameters is necessarily based on the fact that they depend on a set of prior defined variables. Since variables are subject to change over the total duration of the project it's possible that CF projects would still be continued without abatement despite their above average failure rate, in some instances almost amounting to 92%.
According to the report the main root of this problem is the fact that the IASB outline applies to both private and public sector’s business entities whereas the FASB framework concerns both business with the exemption of the non-profit businesses in the private quarter. The application of accounting standards is very different among the many nations.
Accounting is also entails a statement of accepted accounting rules. This rule forms the structure of reference for the financial reporting. Out of the above statement therefore, conceptual framework forms the
The accounting conceptual framework was developed as early as 1970s. The Financial Accounting Standards Board (FASB) is in charge of developing and reviewing the frameworks. Conceptual frameworks have been constantly changed from them. However, individual organizations