Financial Accounting: Conceptual Framework, SEC & Accounting Info

This report examines financial accounting principles, emphasizing how they aid companies in preparing financial statements. It delves into the conceptual framework, highlighting its benefits, weaknesses, and offering recommendations for improvement. The report also discusses the qualities of accounting information, explaining their significance. Finally, it explores the role of the Securities and Exchange Commission (SEC) in shaping accounting theory and practices, including its relationship with the Financial Accounting Standards Board (FASB). The report concludes by emphasizing the importance of financial accounting in presenting accurate financial information to stakeholders and ensuring compliance with established standards.

Running head: Financial Accounting Assignment
Financial Accounting Assignment
Name of the Student
Name of the University
Author Note

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Financial Accounting Assignment
Executive Summary
The report consists of the financial accounting and how it helps the company in preparation
of the financial statement of the company. It also consists of the conceptual framework its
benefits, weakness and recommendation. It also shows about the qualities of the accounting
information and explanation related the same. Lastly it shows the role Securities and
Exchange Commission upon the accounting theory.

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Financial Accounting Assignment
Table of Contents
Introduction................................................................................................................................4
Discussion..................................................................................................................................4
Financial Accounting Standards Board..................................................................................4
Benefits of Conceptual Framework.......................................................................................4
Weakness of Conceptual Framework.....................................................................................5
Recommendation to Conceptual Framework.........................................................................5
Quality of the Accounting Information..................................................................................5
Role of Securities and Exchange Commission in Accounting Theory and Practices............6
Relationship between SEC and FASB...................................................................................6
Conclusion..................................................................................................................................6
Reference....................................................................................................................................8

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Financial Accounting Assignment

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Financial Accounting Assignment
Introduction
Financial accounting is the concept which helps the company to maintain their
financial statement in accordance of the rules and regulation (Beatty & Liao 2014). It helps
the company to summarize and record the accounting transaction in the financial statement. It
show them how they should do the accounting treatment and how they able to do the
valuation of the same in the financial statement. It also emphasis upon the all the rules and
norms which are been in laid in different accounting standard and help the company to follow
all of them so that it able to properly present the financial information to the financial user of
the company (Freeman et al ., 2014).
Discussion
Financial Accounting Standards Board
The board is been establish for the objective to improve the “Generally Accepted
Accounting Principles”. It check all the principles of the GAAP is been followed by the
company and also it come up with amendments in the principles so that it can be easily able
to control all the related issue which the company face while implementing the principles in
the financial statement of the company (Gassen 2014).
Benefits of Conceptual Framework
Conceptual Framework identifies the objective and goals of financial accounting and also
gives the methods to achieve the same in the financial statement. The benefits of the
conceptual framework:
 It help the Board in regards of the making accounting standard
 It help the member to understand the standard and also help them to learn the
application of such standard in the financial accounting (Henderson et al., 2015).

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Financial Accounting Assignment
Weakness of Conceptual Framework
The weakness of Conceptual Framework is been shown below:
 Less flexible as the accounting standard are rigid in nature so it not possible to come
with new creativity as the standard are so rigid to be implement in the financial
accounting (Hoyle, Schaefer & Doupnik 2015).
 The framework can be beneficial for some organization and for some it is not able to
be beneficial so it is not possible for all the organization to follow the same
framework in their accounting policy (Libby 2017).
Recommendation to Conceptual Framework
The recommendations which can be given are:
 It should be made in easy language so that each organization can able to interpret it
and can follow the same in the financial statement of the company.
 It should be made a bit flexible as so that the company can able to adjust it as per their
choice so it will increase the compliance and also company will be happy as they able
to get the opportunity to do as per their need in the financial accounting.
Quality of the Accounting Information
 Relevance – The information should be relevant to the financial user as it should be
useful by the user to take the necessary decision in regards of the financial statement
of the company. As it should be affecting the decision of the user in regards of the
company (Nobes 2014).
 Faithful Representation – It should contain the real information and no false
information should be there in the accounting information as the information is been

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Financial Accounting Assignment
use by the financial user so it should have real information only in the financial
statement (Schaltegger & Burritt 2017).
As per the above quality which is been mention are correct as both should be present in the
financial information so that it will be helpful for the financial users so it should be there in
the financial information.
Additional quality which should be there is Understandability as it should be there in the
accounting information as it should be properly presented by the company so that it can able
to be understand by the user properly and as a result it will able to take necessary decision in
regards of the financial statement of the company.
Role of Securities and Exchange Commission in Accounting Theory and Practices
As before the SEC it can be seen that there were no organized way of the accounting
standard and each company is to follow their own accounting policy related to the financial
statements but SEC came in to the picture and set the standard board so that each company
can able to follow a single set of standard and able to prepare the financial statement of the
company.
Relationship between SEC and FASB
It can be seen that SEC has made two important bodies which help it maintaining the
“Generally Accepted Accounting Principles”. So the two bodies which was set up by the SEC
are “American Institute of Certified Public Accountants” and “Financial Accounting Standard
Board” so it help the to get more compliance in regards of the GAAP. It even enforces to the
companies which are been listed in the stock exchange should follow the “Generally
Accepted Accounting Principles” so this make the principle more widely and help in increase
of the compliance of the same.

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Financial Accounting Assignment
Conclusion
The report is been concluded as the financial accounting process as it define how the
financial accounting help the company to present the financial statement in front of the
financial user. It contains all the details about how they should do the accounting in the
financial statement and show the right way of carrying the amount in the financial statement
of the company as it will help them to give the shareholder better presentation and able to
secure a good position in front of stakeholder. It also show about the conceptual framework
and show the benefits and weakness regarding the financial accounting and also gave some
recommendation to the conceptual framework.
Lastly it give the qualities of the accounting information and also show the roles
which Securities and Exchange Commission have played in regards of the development of
the financial accounting practices.

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Financial Accounting Assignment
Reference
Beatty, A., & Liao, S. (2014). Financial accounting in the banking industry: A review of the
empirical literature. Journal of Accounting and Economics, 58(2-3), 339-383.
Freeman, R. J., Shoulders, C. D., Allison, G. S., Smith Jr, G. R., & Becker, C. J. (2014).
Governmental and nonprofit accounting: Theory and practice. JPAEJOURNAL OF
PUBLIC AFFAIRS EDUCATION VOLUME 20 NUMBER 3, 441.
Gassen, J. (2014). Causal inference in empirical archival financial accounting
research. Accounting, Organizations and Society, 39(7), 535-544.
Henderson, S., Peirson, G., Herbohn, K., & Howieson, B. (2015). Issues in financial
accounting. Pearson Higher Education AU.
Hoyle, J. B., Schaefer, T., & Doupnik, T. (2015). Advanced accounting. McGraw Hill.
Libby, R. (2017). Accounting and human information processing. In The Routledge
Companion to Behavioural Accounting Research (pp. 42-54). Routledge.
Nobes, C. (2014). International classification of financial reporting. Routledge.
Schaltegger, S., & Burritt, R. (2017). Contemporary environmental accounting: issues,
concepts and practice. Routledge.