Accounting Theory and Contemporary Issues

Running head: ACCOUNTING THEORY AND CONTEMPORARY ISSUES
Accounting theory and contemporary issues
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1ACCOUNTING THEORY AND CONTEMPORARY ISSUES
Table of Contents
Answer 1....................................................................................................................................2
Answer 2....................................................................................................................................3
Answer 3....................................................................................................................................3
Answer 4....................................................................................................................................4
Reference....................................................................................................................................6

2ACCOUNTING THEORY AND CONTEMPORARY ISSUES
Answer 1
Main objective of conceptual framework is stating concepts of basic financial
reporting, fundamental accounting, concepts of financial statements, and methods of
measuring the accounting information, identifying the financial events and reporting them
under accounting system. It allows generation of the useful information related to
accountings for making investment and credit related decisions. It plays important role in
issuing and setting the accounting rules and standards that must be built on established body
of objectives and concepts (Aasb.gov.au 2018).
Various advantages of conceptual framework for the purpose of financial reporting
are as follows –
 The framework delivers the standards against which different dedicated and core
accounting practices can be verified in objective manner
 The accounting framework provides all the basics for objectives and rationale.
 It provides opportunity to develop the decisions with consistent approach. The
decisions are mainly concerned with correct accounting practice and different
methods supporting the accounting standards (Cordery and Sinclair 2016).
Various problems and criticisms associated with current framework are as follows –
 It is expensive and time consuming to operate and set up. Countries with less or
lower developed economies may find it unaffordable.
 Conflict may arise between conceptual framework and the accounting standards
already in existence