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The goal of conceptual framework is to provide a coherent and prescriptive framework which will guide and improve accounting practice. A conceptual framework aims to reduce inconsistent practices, delimit the potential for political interference, and enable better understanding of reporting requirements.

At the highest theoretical levels, the Framework states the scope and objectives of financial statements; At the next fundamental conceptual level, it identifies and defines the qualitative characteristics of financial information such as relevance, reliability, comparability, timeliness and understandability; and basic elements of accounting reports such as assets, liabilities, equity, revenue, expenses and profit. At the lower operational levels, the conceptual framework deals with and principles and rules of recognition and measurement of the basic elements and the type of the information to be displayed in financial reports.

2. Some people argue that there is no need for a general theory of accounting, as established in a conceptual framework. They argue that there is no overall theory of physics, biology, botany or psychology, so there is no need for an overall theory of accounting. Furthermore, attempts to develop an overall theory of accounting are futile and unnecessary, since accounting has not needed a conceptual framework so far. Debate this view.

Some accountants ask whether a conceptual framework is necessary. They argue that formulating a general theory of accounting through a conceptual framework is not necessary. We have not had a general theory of accounting in the past, so one is not necessary now.

Although it is true that the profession has survived so far without a formally constructed theory, and could probably continue to do so, numerous problems have arisen because of the lack of a general theory. Some people hold the view that accounting practice is overly permissive because it permits alternative accounting practices to be applied to similar circumstances. Allowing entities to select their own accounting methods within the boundaries of generally accepted accounting principles is deemed desirable by some. Some of early regulations were a distillation of practice, supported by arbitrary arguments rather than a set of consistent principles. Furthermore, inconsistency of practices has been seen as a problem. Because of the lack of a conceptual framework, bad practices at times triumph over good practices. Solomons also sees the conceptual framework as a defence against political interference in the neutrality of accounting reports.

3. What does the IASB Framework describe as the basic objective of accounting? What are its implications?

its widely accepted that accounting data are for decision making, it begins with the stewardship function. Accounting information is seen as input data for the prediction models of users. We mush ask the question: what kind of accounting information is relevant to users' predictions of future performance and position? Furthermore, whereas stewardship is concerned mainly with the past in order to assess what