The concept of having a conceptual framework in accounting is useless Essay

The concept of having a conceptual framework in accounting is useless - Essay Example However, there many critics who argue that the use of the conceptual framework in accounting is useless. The aim of this paper is to critically explain why many people think that the use of the conceptual framework in accounting is useless. Conceptual framework in accounting has received a lot of criticism whereby most of its critics claim that the framework does not provide adequate basis for setting standards. The Financial Accounting Standards Board (FASB) has proved this inadequacy, which is becoming a more rule-based approach. Nevertheless, there is empirical prove that has been collected to support this argument against accounting conceptual framework (Hines 2011, p. 45). Out of the five characteristics of accounting conceptual framework, most people only rely on one characteristics, reliability, on accounting statements to make financial decisions. In addition, accounting familiarity influences many people to rely on or use financial statements instead of finding other accurate ways for finding this information. Therefore, it is not only that accounting conceptual framework needs alterations, but also changes to help come up with accounting standards that are principles-based. Implementing principles-based stand ards means that many users will be able to use irrespective of their backgrounds. Many people have been criticized FASB for not advising organizations to give out information that is useful and interpretable to the users of financial statements. Its conceptual framework is the main source of all accounting standards (Hines 2011, p. 78). Therefore, the conceptual framework for accounting must exemplify several qualitative characteristics in order to ensure that the financial reporting is able to provide financial statement users with information that is adequate for decision making. The accounting conceptual framework of the United States was founded in the year 1980. There are five key characteristics of accounting information, which