Question

a) Explain what is meant by the critical perspective of accounting

b) Evaluate the ongoing project of the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) to converge their conceptual frameworks from a critical perspective.

c) Are critical theorists likely to support moves to find a way to measure

externalities in seeking to calculate a sustainable profit?

d) Would critical theorists support or oppose the development of

standards for sustainability reporting.

Answer 1

Question No1 Answer-

Critical Perspective of Accounting as the name suggests perspective of Accounting principles and and theories is critical in modern environment. It aims to give a platform to the growing number of Accounting researchers and practitioners. As critical theorist believe that conventional therory and practices of Accounting is not suitable for the current and future challenges of environment. They believe that a new literature should emerge to cope up with corporate, political and social challenges.

Question No. 2- Answer

To converge conceptual framework FASB and IASB create and develop a sound foundation for future accounting standards that are principles based internally consistent and internationally covered. Some convergence projects have been completed successfully as envisioned aligned principal while some are partially got success. Some projects were closed due to non approval of it's memebers. Some projects continue including such major projects like revenue recognition, lease,and financial instruments. Recently SEC has agreed to remove requirement of providing reconciliation to US GAAP from international firm reporting under IRFS and listed in U.S. Stilll from crtitical point of view FASB and IASB need to focus on convergence of modern challenges in accounting practices that are suited to corporate, political and social behavior.

Question No.3 - Answer

To find a way to measure externalities in seeking to calculate a sustainable profit many Critical theorists supports while calculating sustainable profit it is essential to forecast the future challenges and environment that will affect the sustainability of the business and consequently on profit. Externalities are difficult to measure when it comes to calculate sustainable profit this is the main reason why most of the conversational theorists do not support to reformulate corporate, social and political activity. While to achieve sustainable profit a business should consider all aspects affecting it's future growth or sustainability including externalities which consists major changes.

Question No. 4 - Answer

As development of standards for sustainability reporting crtitical theorists do not oppose clearly but there are many facts produced by them not acceptable in context of sustainable reporting like environmental,social and political effect should be clearly disclose in sustainability reporting there should be a general accepted guidelines and standards for sustainability reporting.