At lunch recently, two accountants were discussing the merits of the FASB's conceptual framework project, which resulted in the publication of seven Statements of Financial Accounting Concepts and required more than ten years of effort.One accountant thought the effort was a waste of resources, since accounting was unlike physics, chemistry, and biology, where natural laws apply.The other accountant thought the effort was very valuable.He stated that "accounting, like any other discipline, benefits from having a coherent theory."
Required:
Write a brief essay that discusses the advantages that are derived from the existence of a conceptual framework for financial accounting and reporting.

Question

nathan allred · Accepted Answer

Final Answer : The FASB's conceptual framework should result in the following advantages.It should (1)guide the FASB in establishing accounting standards, (2)provide a framework for resolving accounting questions in situations where a standard doesn't currently exist, (3)determine the bounds for judgment in the preparation of financial statements, (4)increase users' understanding of and confidence in financial reporting, and (5)enhance comparability.

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