Word Count: 994 excluding bibliographies and list of references
The recommendation of the Dearing report to create a conceptual framework make us wonder what a conceptual framework is for financial accounting and why it is a necessity.
We will see the nature of a conceptual framework through the definitions and its objectives then we will analyse the need of such a framework by considering the existing conceptual frameworks.
AT Foulks Lynch(1998) has defined a conceptual framework as: “a coherent system of inter-related objectives and fundamentals that should lead to consistent standards that prescribe the nature, function and limits of financial accounting and financial statement”(chapter 2).
A conceptual framework guides the body responsible for establishing accounting standards and ensures that standards are based on fundamental principles; it provides a frame of reference for resolving accounting questions in the absence of a specific promulgated standard. It also determines bounds for judgment in preparing financial statements; it increases financial statement user’s understanding of, and confidence in, financial statements and enhances comparability (Elliott & Elliott,2009).
So, as Gore R. and Zimmerman D. wrote: “A conceptual framework can be compared to a constitution for financial reporting, providing the foundation of standards” (p1).
The objectives of a conceptual framework are: to ensure statements are convergent leading to a single set of high level global accounting standards, to identify the users and provide them with the information that is most useful to them, to solve accounting disputes, to define the objectives of financial statements and to define fundamental principles which then do not have to be repeated in accounting standards.
Recently, there have been several attempts to develop what a... [continue]
Citer cette dissertation
(2011, 01). What Is A Conceptual Framework For Financial Accounting And Why Might One Be Needed?. DissertationsGratuites.com. Récupérée 01, 2011, à partir de http://www.dissertationsgratuites.com/dissertations/What-Is-a-Conceptual-Framework-For/147087.html
"What Is A Conceptual Framework For Financial Accounting And Why Might One Be Needed?" DissertationsGratuites.com. 01 2011. 01 2011 <http://www.dissertationsgratuites.com/dissertations/What-Is-a-Conceptual-Framework-For/147087.html>.
"What Is A Conceptual Framework For Financial Accounting And Why Might One Be Needed?." DissertationsGratuites.com. 01, 2011. Accédé 01, 2011. http://www.dissertationsgratuites.com/dissertations/What-Is-a-Conceptual-Framework-For/147087.html.