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Ethics and Conceptual Framework Paper

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Ethics and Conceptual Framework Paper
Conceptual Framework
There are two major philosophies in accounting consisting of a principles-based system for accounting and a rules-based system for accounting. The following discussion will speak about these two philosophies and will define one as being a best fit for encompassing the role of ethics and the conceptual framework.
The conceptual framework was established by the Financial Accounting Standards Board (FASB) and is used to help define the boundaries of accounting. It gives definitions of key terms and establishes consistent standards by which fundamental issues are defined. This makes it easier to facilitate discussion and leads to greater efficiency in making accounting judgments.
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Since accountants are making important financial decisions that often have a large impact on the financial well-being of companies and individuals, there have been increasing instances of lawsuits brought against auditors for violations to policies. These are all supporting reasons why accounting requires sound judgment and ethics and a willingness to be proactive in researching to gain knowledge
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