Question

1. Explain how academic research has influenced the development of accounting theories and the need for accounting information. Give examples.

2. Discuss the goals objectives of the conceptual framework of accounting.

3. What are the major disciplines that have influenced the development of accounting theory?

Answer 1

1.

Based on the fact that the accountancy is one of the social sciences which aim to serve various needs of the private and public business facilities, it is affected by the changes of the general economic, social, legal and political and political conditions prevailing in each country or certain environment at each period. The accounting information is resulted by certain requirements which change due to various environmental factors within the economic, social, legal and political environments in which the accountancy works. In order to achieve this development of the accountancy, various studies and researches related to the different aspects of accountancy shall be conducted in the framework of the accounting scientific research represented by the scientific researches performed by the academics in the universities or the professionals practicing the occupation within the continuous education and the graduate studies of Master and Phd degrees; based on such studies, the accountancy contributes to serve the economic development through providing the integrated accounting information which can be relied on.


Hence, the accounting scientific research plays the major role in the economic development: It can be said that the scope of the accounting scientific research can be categorized by the sector in which the study fall within, on the one hand, and by the fields of the accounting knowledge, on the other hand.

The researcher sees that the variety of the accounting scientific research which covers all economic sectors contributes to achieve the economic development through providing the appropriate information of each economic sector; such information may contribute to achieve the optimal distribution and adequate exploitation of the resources of each sector in addition
to sound decision-making.

2.

If there were no framework for preparing financial statement, accounting standards would be developed in a random, haphazard way to deal with issues as they arise. This would result in standards which would be inconsistent with each other or legislation. By having a single conceptual framework, preparers and users of financial statements understand that accounting practices and accounting standards are based on this common ideology.

A framework also provides guidance for unusual transactions, which may be otherwise open to interpretation. Some people believe that by having a conceptual framework, it improves the credibility of the accounting profession overall.

The purpose of the Conceptual Framework is:

1. to assist in the development of future accounting standards and in its review of existing accounting standards, ensuring consistency across standards
2. to assist in promoting harmonisation of regulations, accounting standards and procedures relating to the presentation of financial statements by providing a basis for reducing the number of alternative accounting treatments permitted by accounting standards,
3. to assist national standard-setting bodies in developing national accounting standards;
4. To assist preparers of financial statements in applying international financial reporting standards and in dealing with topics that have yet to form the subject of an accounting standard.
5. to assist users of financial statements in interpreting the information contained in financial statements prepared in compliance with international financial reporting standards;
6. to assist auditors in forming an opinion on whether financial statements comply with international accounting standards;.