Question

Is the IASB framework all-encompassing and “all-knowing” or is there valid criticism of the model and process? Please substantiate your position either way.

Answer 1

The conceptual framework of the IASB does not embrace an accounting standard but somewhat ideas or methods that a reporting entity need to follow in the progress of financial statements. As a way of doing things, the IASB has been operative in providing the concepts for which IFRS can apply. The framework is not all including but has tried to include the serious matters desirable for international accounting standards such as the reliability of financial reports by giving path on how structure financial reporting practices. It has also delivered setters with a framework for developing standards that are internally and externally dependable. It specifies the purposes for core and dedicated accounting hence aiding in constancy of accounting policy decisions. Accountants can effortlessly connect and comprehend standard setting bodies since the framework is very clear on nature, and restrictions of accounting.

On the other hand, since this framework is not all covering, it has its condemnations. First is that the accounting environment keeps on changing and the framework is inflexible as it can occasionally not bring forward new ideas. Another feature is that it produces battle among the framework and the standards that an entity used to apply prior to its application. Giving too much guidance to standards setting could limit its applicability in changing accounting environments and thus fail in its core role of direction to accounting. Lastly, some entities could find the CF not acceptable or workable since several sections of the CF may fail to offer much course as well as recourse toward accounting hence proving unbending and creating challenges to incorporate new ideas.