Question

1. Explain Hines view that the CF is a socially constructed and socially constructing document forming a body of professional knowledge essential to the existence of the Accounting Profession. (ii) Could the two views be aligned based on the notion that accounting standards do change?b) Hines arguments is that a CF is a defensive document produced by the Accounting Profession in reaction to financial crises when it becomes threatened by government regulation. Explain whether you agree with this view.

Answer 1

1. Explain Hines view that the CF is a socially constructed and socially constructing document forming a body of professional knowledge essential to the existence of the Accounting Profession.

Ans:-

• According to most creators, a group of (formal) information is the critical attribute of callings.
• It is the assumed presence of this information which legitimizes cases to aptitude, proficient forces, self-governance and authority over work.
• The assortment of learning around which the budgetary bookkeeping professionalization venture has occurred is portrayed and it is demonstrated that professionalization occurred around an assortment of individual characteristics, for example, genuineness, autonomy and decency – aptitudes not particular to "bookkeepers, for example : handwriting, number-crunching, work and information, which at the time were contestable just like the area of the lawful calling.
• As indicated by Hine - a noteworthy reason expressed by the FASB for undertaking its CF venture was to give an intelligent applied center that would empower the setting of hypothetically grounded and steady instead of discretionary and specially appointed gauges".

(ii) Could the two views be aligned based on the notion that accounting standards do change?

Ans:-

• Many scientists have called attention to the deficiency, the irregularity, the roundabout thinking and non-ope judiciousness of the American Framework (Dopuch and Sundern 1980; Solomons 1986; Gerboth 1987; Hines 1989).
• Measures declared before the finish of the Framework had not been reconsidered and in that capacity were not predictable.
• This raises the issue of an ex-post system. In any case, notwithstanding for new measures, the FASB CF has not given adequate hypothetical establishing to accomplish the consistency and similarity targets 3 .
• Mozes (2003) clarifies how the dubiousness of the FASB CF and its level of reflection empowered the SEC to restrict the FASB‟s recommendations about representing worker investment opportunities in 1993.

b) Hines arguments is that a CF is a defensive document produced by the Accounting Profession in reaction to financial crises when it becomes threatened by government regulation. Explain whether you agree with this view.

Ans:-

• No I don't concur with this view since formation of CF identifies with the legitimacy of bookkeeping as a control, and the point can be put a few distinctive ways.
• Any legitimate and self-regarding discipline needs a built up 'state of mind', and a CF tries to give this.
• This does not infer the formation of hypothesis only for hypothesis. A concurred state of mind, with sound essential presumptions and definitions, can substantially aid the creation and task of steady practices.
• Given the presence of a wide assortment of choices with respect to bookkeeping estimation and detailing practices, lucidness and consistency are required in the bookkeeping treatment of various particular issues.
• A CF ought to give the parameters inside which such lucidness and consistency can be accomplished.