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Developing a conceptual framework is an impossible possibility - Essay Example
Finance & Accounting
Pages 8 (2008 words)
Running Head: Conceptual Framework: Impossible Possibility Conceptual Framework: Impossible Possibility Developing a Conceptual Framework is an Impossible Possibility Conceptual Framework Overview: A conceptual framework in accounting discipline determines the conceptual and theoretical issues confining the financial reporting and forms a comprehensive approach with a stable foundation that undermines the establishment of accounting principles…
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 to process the consistency, standardisation and accuracy of accounts based on reporting framework (Archer, 1993). The establishment of accounting framework board was to standardise the accounting practices and provide theoretical basis for measuring the financial reports. It was the earliest basis for establishment of conceptual framework by FASB for accounting concepts, reporting standards and objectives of business operations. The rise of financial scandals such as WorldCom (UK) and BBCI (UK) resulted in establishment of IASC (International Accounting Standards Committee) in 1989, which is responsible for presenting a framework for demonstration and preparation of financial records. It was later succeeded by IASB (International Accounting Standard Board) that is based on the conceptual framework by FASB since 2001. ...
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