ificated Public Accountants (AICPA) set up Accounting Research Division. Accounting Research Division tries to emphasize the inner link between assumptions and principles and put forward a financial accounting conceptual framework whose core is ‘hypothesis – principle’ (Christine, 2013, p.171). Academic circles at that time had a widespread belief that accounting standards have economic consequences or macro effect. Obviously, if the belief is true, accounting standards formulated by the authorities should not be the folk and the government authorities should have a higher authority. Only if accounting standards are technical, shall it be formulated by non-governmental organizations. At this point, the accounting profession felt the urgency of accounting theory research deeply (Jones, 1993, p.96).
Regarding accounting theory as a special commodity, it can be studied from an analysis of supply and demand. Accounting theory is in need for that it can act as a pretext, especially in the United States, a so-called democracy and control society. Accounting theory, therefore, ought to have the function of apology to be used for various government restrictions on accounting. The emergence of CF effectively fills this excuse gap (Edelman, 1999, p.106).
Benefits of CF CF的好处
Since the 1970 s, with the continuous development of economy and the evolution and innovation of the market, the traditional accounting theory concept was hard-hit and censorious. There is an urgent need to establish a set of complete and normative accounting theory framework, which can adapt to the new economic situation, in order to guide the formulation of accounting standards and solve the new accounting problems as the existing accounting standards have not involved in (Kline, 1998). In December 1976, the U.S. Financial Accounting Standards Board (FASB) released ‘Conceptual framework for Financial Accounting and Reporting’ in the technical terms for the first time. Then the western academia, led by the United States and Britain, have made flourishing study on it and obtained a series of important results.
FASB formulated and published the CF initially in order to provide an excuse for external criticism on accounting standards. At the same time, FASB tried to help the accounting profession continue to enjoy the tight to set accounting standards, as is the most direct goal of CF.
However, after establishing and perfecting CF, some countries or accounting professional groups indeed believed that, the accounting standards have very important effects in establishing and perfecting accounting standards. In summary, there are two main effects: firstly, CF can not only better guide the formulation of accounting standards, but also guide the new accounting standards. Secondly, in the absence of authority files, CF can provide guidance for people in the analysis of new or emerging new problems in the financial accounting and reporting. Especially in the preparation of financial information, CF provides theoretical basis for accounting personnel professional judgment (Joanna, 2014).
In CF, concept should be a basic concept so that other concepts enable to deduce from it. It means that other concepts can be produced by reasoning methods and accounting standards formulated by internal consistency. Above all, what should be included in CF ought to be
