How does conceptual framework of accounting attempt to create a theory of accounting ?Describe the components of the IASB framework and how it contributes to a theory of accounting

Q.1. How does conceptual frameworks of accounting attempt to create a theory of accounting? Describe the components of the IASB Framework and how it contributes to a theory of accounting.

Q.2.How important is it that standard setters agree on objectives, concepts and definitions before they develop a conceptual framework of accounting? Why has the FASB been directed to produce more objective-based standards? Do you consider this to be a realistic standard setting objective?

Q.3.What is business risk auditing? How does it differ from traditional substantive auditing? Why do critics believe it is used to justify selling more consulting services to audit clients? How could business risk auditing be blamed for failures such as Enron?

Q.4. What is the difference between art and science? Is accounting an art or a science? Does it matter? Why or why not?

Q.5.The expressions ‘truth', ‘justice' and ‘fairness' have all been applied to describe desirable characteristics of accounting information. What role do you think they play in practice? Are they included in the IASB Framework? If so, how? If not, why not?

Questions

1. What are the criteria in IASB and FAS8 standards for classifying a lease as a finance lease?

2. What is meant by 'bright lines' in accounting standards?Give examples of the 'bright lines' in US leasing standards.

3. Mr Ketz does not believe the IASB approach of principles-based standards will be effective for leases. Provide details of the arguments he presents in favour of his case and consider the alternative view.

4. Do accounting practices under current IASB leasing standards comply with the definition and recognition criteria of the IASB Framework?