A judgmental international classification of financial reporting Essay

A judgmental international classification of financial reporting Practices - Essay ExampleWithout conceptual model there have been many another(prenominal) issues and problems that have emerged with the passage of time and different people have different opinions on solving the problem (Hines, 1988). Therefore there has been a need for most guiding principles or some kind of structure on the basis of which different decisions back end be taken and reporting of financial statements could become time-tested and lucid (Zeff, 1972). With regard to this, conceptual model is helpful because it provides a guideline and a foundation of anything and it can be referred to by people (Nobes, 2006). Conceptual framework issued by FASBThe following image gives an overview of the conceptual framework issued by FASB. In an ideal world accounting reports that ar developed using the suggested conceptual framework would be more useful than other accounting reports which are prepared without u sing of conceptual framework. ... Considering its importance, there are several objectives of accounting department and these objectives are described below Preparing Reliable and Consistent Financial Statements Accounting has a major role to play in any organisation (Amaratunga , & Baldry, 2003) because accountants prepare financial statements and records the financial transactions of the company (McCarthy, 1982). These reports and financial statements reflect the proper financial information which is helpful for the stakeholders of the company including investors, employees, shareholders, suppliers, government agencies, customers and potential customers as well as competitors (Ball, & Brown, 1968). The main objective of accounting is to provide information which is useful for the users of financial statements like investors, creditors, and other stakeholders (Chua, 1986). Therefore it is integral that the information provided by the organisation is useful, accurate, authentic, con sistent and reliable. Inaccurate information can mislead the users of the financial statements and it could also distort the decisions taken by the management on the basis of financial statements therefore it is burning(prenominal) for the organisation to prepare financial statements that follow the principles accepted by others as well (Hogarth, 1993). Thus, a conceptual framework would be required which the accountant can use as a guideline while preparing financial statements to make the financial information consistent and reliable. Keeping Records of all the transactions in a systematic way The other major objective of accounting is to keep records of all the transactions that occur in day to day routine processes in a systematic way (Abdel-Khalik, & Ajinka, 1983)