The Conceptual Framework for Financial Reporting
CRITIQUES THAT EXIST FOR THE CONCEPTUAL FRAMEWORK
ICB CONEPTUAL FRAMEWORK DISSERTATION
RTAP CRITIQUES FOR CONCEPTUAL FRAMEWORK
Submitted in partial fulfilment of the requirements for the National Diploma:
FINANCIAL ACCOUNTING
(SAQA ID: 20366)
October 2024
DECLARATION BY STUDENT:
I declare that this min-dissertation submitted by me is my own work that l have referenced all
the sources that l have used and that no part was previously submitted at any tertiary
institution.
Signature: YOUR SIGNANTURE Date: SUBMISSION DATE
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,Table of Contents
Acknowledgements................................................................................................ 1
Abbreviations Used................................................................................................ 2
Chapter 1. Introduction To the Conceptual Framework for Financial Reporting.....3
1.1 Purpose of the Dissertation..........................................................................3
1.2 Scope and Objectives................................................................................... 3
1.3 Objectives..................................................................................................... 4
1.4 Research Methodology................................................................................. 4
Chapter 2. Brief Overview of the Conceptual Framework......................................6
2.1 History and Development............................................................................. 6
2.2 Key Components and Objectives..................................................................6
2.3 Objectives of General-Purpose Financial Reporting:.....................................6
2.4 Importance in Financial Reporting................................................................7
Chapter 3. Positive International Critique (Perceived Strengths)...........................8
3.1 Consistency and Comparability....................................................................8
3.2 Qualitative characteristics of useful financial information............................9
3.3 Fundamental qualitative characteristics.......................................................9
3.4 Applying the fundamental qualitative characteristics.................................11
3.5 Applying the enhancing qualitative characteristics....................................13
3.6 Transparency and Accountability................................................................14
3.7 Guidance for Standard-Setting...................................................................15
3.8 Key Functions of the Conceptual Framework in Standard-Setting:.............15
3.8 Impact of the Conceptual Framework.........................................................16
Chapter 4. Negative International Critique (Perceived Weaknesses)...................18
4.1 Complexity and Understandability..............................................................18
4.2 Flexibility vs. Rigidity..................................................................................19
4.3 Relevance and Timelines............................................................................19
4.4 Internal Consistency................................................................................... 21
4.5 Constraints based on the Objectives of Financial Reporting.......................22
4.6 Constraints on Elements from the Objectives of Financial Reporting.........23
4.7 Environments Surrounding Accounting Standards......................................24
4.8 Characteristics as general constraints: Comparability................................26
4.9 Constraints on information included in General Purpose Financial Reports 28
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, 4.10 Balance between the qualitative characteristics......................................30
Chapter 5: Practical Evidence Supporting Findings..............................................31
5.1 Case Studies and Examples........................................................................31
5.2 Empirical Research..................................................................................... 32
Chapter 6. Summary of International Recommendations for Improvement.........34
6.1 Simplification and Clarity............................................................................34
6.2 Enhanced Guidance on Measurement and Disclosure................................35
6.3 Integration of Emerging Issues...................................................................35
6.4 Increased Responsiveness to Economic Changes......................................36
6.5 Issues for Consideration............................................................................. 37
Bibliography......................................................................................................... 40
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, Acknowledgements
Firstly, I would like to thank God for His sustenance throughout this time and for the
strength, knowledge, and wisdom He has provided me. Secondly, I express my heartfelt
gratitude to my family for their patience and support during this journey. I am also deeply
thankful to my advisor and editor for their invaluable guidance and constructive feedback,
which have been instrumental in shaping this work. Finally, I extend my sincere appreciation
to all the respondents involved in this study for their willingness to participate and for sharing
their valuable insights. Your contributions have greatly enriched this research.
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