advancement of conceptual framework projects


a) What advantages or benefits have been claimed by standard-setters in support of the advancement of conceptual framework projects? In your response, identify groups which stand to benefit from the development of conceptual framework projects.

b) Hines (1989, p. 89) says that conceptual frameworks are ‘a strategic manoeuvre for providing legitimacy to standard setting bodies during periods of competition or threatened government intervention’. Compare and contrast the arguments of Hines with the advantages (and who stands to benefit from those advantages) you identified in part a).

(Reference: Hines, R (1989) “Financial accounting knowledge, conceptual framework projects and the social construction of the Accounting profession”. Accounting, Auditing and Accountability Journal, 2(2), pp. 72-92)

Question 2

The AASB Framework OB2 states that: “The objective of general purpose financial reporting is to provide financial information about the reporting entity that is useful to existing and potential investors, lenders and other creditors in making decisions about providing resources to the entity. Those decisions involve buying, selling or holding equity and debt instruments, and providing or settling loans and other forms of credit”

Does the identification of particular groups of users have implications for the measurement basis that will ultimately be adopted by the AASB for use in Australia? Justify your position. In your response you should consider whether fair values or historical costs would be more relevant to the users identified in the AASB Framework.

Question 3 

Despite the efforts of various people, including Chambers, Sterling, Edwards and Bell, historical cost accounting is still a widely used method within financial reporting. Why do you think that historical cost accounting remains an accepted method of measurement? In your response, you should consider the merits (or otherwise) of the methods proposed by the aforementioned authors (CCA, CoCoA, CPPA etc).

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