The Role of Conceptual Framework in Accounting - 1606 Words

Introduction: Although conceptual framework standardises the accounting practices by providing the accounting bodies with well-defined financial protocols, it often fails to meet the requirements of different users. The adaptation of standardised financial statements enables the standard setting boards to enhance suitability of the financial standards according to competition in market without creating any legal issues (Beasley, 2010). On other hand, implementation of conceptual framework also reduces government control on financial bodies. However, Hines (1989) conveys that conceptual framework can be used by financial bodies as a strategic tool for reducing the impacts of government intervention and also for modifying the financial standards legally during competition. The current essay deals with analysis of the significance of Hines’s view on the conceptual framework. 2. The Role of The Conceptual Framework in accounting: Jia-shu (2004) proposes that the adaptation of the conceptual framework reduces the effectiveness of financial standards due to the reason being that the accounting requirements of users are different based on their needs. The development of standardised policies protocols increases the complexity in accounting for different users. However, Kalbers (2009) states that the development of the conceptual famework enables the financial entities to modify their financial standards with ease. 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