In an attachment Essay Example | Topics and Well Written Essays - 1500 words

In an attachment - Essay Example The conceptual framework is criticised for not fulfilling its functional objectives, principally that of providing a basis for guiding standard-setting and resolving accounting controversies. Notably, the body has failed to achieve its goals of standardizing the financial statements due to its inherent focus on reporting rather in the quality of statements. Critics have suggested a convergence of the FASB and the IASB as the best approach to eliminate the weaknesses of the conceptual framework and inject efficiency in international accounting. The focus of this essay is to identify the weaknesses of this framework and recommend possible strategies to eliminate them. Before the establishment of the IFRS, various bodies that regulated standards were localized to their nations and states. Such bodies include the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB). The IASB originated from the International Accounting Standards Committee that regulated business accounting the USA. Later, IASB became the mother of the IFRS. On the other hand, the Financial Accounting Standards Board is a private non-profit organization and is responsible for developing generally acceptable accounting principles within USA for public organizations. Both organizations have closely related missions and goals. At the end of the day, they are expected to establish standards that regulate investors in the business market, so as to make the business operations transparent and comparable. The IASB, in its nature, is a principle based accounting system that confides in principles rather that any set of fixed rules (Gebhardt & D ean, 2008). This is among the reasons why the board has attracted more attention and found as the most appropriate system of international accounting. However, the system seems to suffer from a number of weaknesses that have