Conceptual Framework And Ethics Theories

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Accounting 381: Winter 2012 (Wed Evening Class) Reading Assignment 1: Conceptual Framework and Ethics Theories Zhao, Siyi 1. How does the Conceptual Framework aid in the GAAP standard setting process? The Conceptual Framework creates fundamentals of the underlying concepts help achieve goals and purposes of financial reporting. FASB established this framework accidentally when it got AICPA's job in 1937. At that time, the projects of replacing concepts of "what financial accounting ought to be" to "what it is" was on its initial agenda firstly was incepted by AICPA. This framework makes accountants' work easier. First, with its standard-setting, redebate fundamental issues such as "what is an asset?" were diminished. In other word, rational debate cannot occur without the framework. Bases on that, it create an general communication platform for the accounting professionals. Therefore, personal biases on standard-setting decisions were eliminated, also fewer political pressures in making accounting judgments occurs. This created more room for FSAB and its frameworks to enhance themselves. Eventually, the whole standards became a international general setting. 2. Describe each of the kinds of moral theories discussed in the framework. 3. Describe an ethical dilemma you faced in the workplace and what factors you considered to determine whatever action (or non-action) you took. Five kinds of moral theories were discussed: * Whether it will produce the most good and do the least harm to all the stakeholders? * Whether it best respects the basic human rights of all stakeholders? * Whether it treats people equally? In other word, if the decision fits commontsense of fair? * Whether it best serves the community as a whole instead of just some members? * Whether it leads me to act as the sort of person I want to be I was in charge

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