Conceptual Framework Applicable to Australian Accounting Profession

This presentation discusses the importance of conceptual frameworks in the Australian accounting profession, its purpose, advantages, and disadvantages. It includes an analysis of two articles and references for further reading.

CONCEPTUAL FRAMEWORK
APPLICABLE TO AUSTALIAN
ACCOUNTING PROFESSION.

Why conceptual frameworks.
 Conceptual framework creates and maintains the fundamentals of the accounting
standards.
 Conceptual frameworks outline the objectives and basis of development of the
accounting standards.
 It’s a an important theory that outlines the understanding and reasoning underlying
the financial reporting in general (Macve R. 2015).

Articles analysis.
 Similarities.
 In both articles the objectives remain the same which is the preparation of financial
statements.
 Both articles reorganizes the uniformity of accounting standards. I.e. Financial
Accounting Standards Boards and International Accounting Standards Board.
 The consistency and comprehension of the accounting profession is maintained.
 The past, present and future concept of financial reporting is agreed unto.

Why is the conceptual framework necessary to the
Australian Accounting profession?
 Technological advancement.- The Australian accounting profession need to cope with
the rest of the world.
 International requirements. Currently the IFRS is the minimum requirement for any
accounting country.
 Conceptual framework acts as the oversea of the Australian accounting profession.
 It’s a simplified form of International Financial Reporting Standards (IFRS) (Ravitch and
Riggan, 2012).

Disadvantages of conceptual
frameworks.
 Due to its rule based concept it gives room for manipulation.
 Conceptual framework is the basis of creative accounting.
 Complex to be understand easily especially by third parties.
 Too procedural and can be boring.
 In some cases the language used is vague which requires professional interpretation
(Schroeder, Clark and Cathey, 2016).

Purpose of the Conceptual framework as outlined in the
two articles.
.
 The IASB conceptual frameworks form the basis of harmonization of procedures,
accounting standards and regulation.
 The IASB conceptual frameworks assist practitioners and non-practitioners on the
interpretation contained in compliance with the international standards (Christian and
Ludenbach, 2013).
 The conceptual framework helps the auditors in forming an opinion on the financial
statements.
 Used as a reference during the preparation of financial statements (Duncan A, 2012).

References.
 Christian D and Ludenbach N, (2013). IFRS Essentials.
 Cornelia N. Geanina S. AND Nicoleta E. (2011). IASB Framework Regarding the
Harmonization of Financial Statements. VOL 11 PP 53-60. Available at:
https://search.proquest.com/business/docview/2108767224/1877198D380D43B2PQ/6?a
ccountid=30552
. (Accessed 23/09/2018).
 Duncan A. (2012). The Conceptual Framework of Quantum Field Theory.
 Macve R, (2015). A Conceptual Framework for Financial Accounting and Reporting: Vision,
Tool or Threat?
 Schroeder R, Clark M and Cathey, (2016). Financial Accounting Theory and Analysis: Text
and cases.
 Tomaszewski G, Yeong C. (2018). The Conceptual Framework: Past, Present and Future.
Volume38 p47-58. Available at: https
://search.proquest.com/business/docview/2085000705/1877198D380D43B2PQ/4?accou
ntid=30552
(accessed 23/09/2018)