SUMMARY ACCOUNTING THEORYZahrina 1206213826 Adinda Dewi Putri 1206228733Fanisya Putri 1206214034 Erika Selvanela Nariza 1206266870B. Objectives of Conceptual FrameworkIASB and FASB states that the objective of financial statements is to communicate financial information to the user information. This objective can be achieved if the information: useful for taking economic decisions and useful in assessing cash flow prospects. And, IASB states that the framework should: Defining the purpose of financial statements, identify the qualitative characteristics that make information in financial statements useful, defines the basic elements of financial statements and the concepts for recognizing and measuring their financial statements

D. A Critique of Conceptual FrameworkTwo broad areas in our analysis:

1. Scientific critismsThe inability of the conceptual framework in giving instructions and ways in accounting practices that can produce useful information in decision making. It also not detail and vague definitions of the elements of accounting.

2. Descriptive and non-operational Ontological and Epistomological Assumptions

ONTOLOGIST Focus: provide information to users of financial statements without bias and with detachment. Solomons: accounting is a 'financial mapmaking’; how accounting could represent the truth so that people can then react as they wish.

EPISTOMOLOGIST Affected by hypothetico-deductive approach. Circularity of Reasoning

In some countries, the conceptual framework is represented by the internal circulation. Framework from FASB tried to solve it by referring to the notion from accounting informant who has enough knowledge to decide and interpret financial statements.

An Unscientific Discipline Stamp:“accounting is an approach to the law / rules rather than physical science”. Accounting face market imperfections and related to subjective basics, human process in making a decision. Elements of theoretical and empirical: defined and applied in accounting, and not enough for a definition of the scientific paradigm. Theoretical presentation: the application of ontological, epistemological, and methodological rules relating to the scope of learning.

Positive Research The opinion that the basic focus from conceptual framework reject empirical findings from positive accounting research. The existence of a conflict between the positive accounting research with conceptual framework is the evidence that the market is not always efficient. If the conceptual framework can ensure each individual or group can obtain useful information then this will present a useful purpose.

The Conceptual Framework as a Policy Document The separation between theory and policy is very important. FASB defines the conceptual framework as a constitution. Facts about FASB conceptual framework in several agencies illustrates the prevailing political process in building a framework.

Professional Values and Self-Preservation Self-preservation implies personal interests, while suggesting the ideals of professional values and the interests of others.

E. Conceptual Framework for Auditing Standards

SUMMARY ACCOUNTING THEORYZahrina 1206213826 Adinda Dewi Putri 1206228733Fanisya Putri 1206214034 Erika Selvanela Nariza 1206266870Reduction of pressure on the client system testing can reduce the time spent on the audit & lowering the sample used, known as business risk auditing. Business risk auditing: an audit form that considers the risk of the client as part of the audit evidence collection process. Clients with effective internal control over lower risk of errors can reduce the resources, and the cost of the audit of the client.