The Conceptual Framework is knowledge-based, articulated, shared, coherent, consistent with the unit and/or institutional missions, and continuously evaluated. (‘CollegeofEducationand Human Services’) The conceptual frame work of the accounting standards is an important factor as it underlies the main objective and the functionality of the accounting standards. “The conceptual framework has far-reaching practical implications for the direction of financial reporting. And many people agree.” (Mackintosh, 2006) It is considered to be a top priority amongst finance managers and by the investors in a business. “In a recent survey, members of the 100 Group of finance directors said development of a common framework should be the top priority for the International Accounting Standards Board (IASB).” (Mackintosh, 2006)
Mackintosh mentioned in his works that there are four main concerns as to why the conceptual framework of the accounting principles and standards is so paramount. These deal with the fact that the framework should be such that it presents the financial reporting through a single objective which pertains to providing information to the end user. There should be no laminating of the facts or polishing of the numbers to present a healthy picture. Aside from this the concerns also relate to the users of the financial reports. The framework should provide for such a format that is comprehendible by a vast variety and types of end users. The third concern pertained s to the financial reporting of the transactions and the activities themselves. The last concern that is highlighted pertaining to the framework of the accounting standards relates to the reliability and the resultant justification of the data provided in the financial reports. The conceptual framework for the counting standards requires there to be an ethical and fair representation of accounts and the statistics of the business in the financial reports which is accurate and reliable.