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Conceptual frameworks of accounting from an information perspective

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  • John Christensen

Abstract

This paper analyses the benefits of accounting regulation and a conceptual framework using an information economics approach that allows consideration of uncertainty, multiple agents, demand for information, and multiple information sources. It also allows private information to enter the analysis. The analysis leads to a set of fundamental properties of accounting information. It is argued that the set of qualitative characteristics typically contained in conceptual frameworks does not adequately aggregate the information demands of users of accounting information. For example, the IASB's conceptual framework contains no guidelines for the trade‐off between relevance and reliability. Furthermore, neutrality might not be part of an optimal regulation. The statistical bias introduced by the stewardship use of accounting information is not necessarily undesirable and will always remain; stewardship is the characteristic of accounting information that provides incentives for management to act in the desired way. Accounting information is inherently late compared to other information sources but influences and constrains the content of more timely sources. The accounting system does not exist in a vacuum. Other information sources are present and the purpose of the accounting system cannot be analysed without considering the existence of other information sources. Finally, financial statements are audited by an independent auditor. This implies that accounting data are hard to manipulate.

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  • John Christensen, 2010. "Conceptual frameworks of accounting from an information perspective," Accounting and Business Research, Taylor & Francis Journals, vol. 40(3), pages 287-299.
    • Handle: RePEc:taf:acctbr:v:40:y:2010:i:3:p:287-299
    DOI: 10.1080/00014788.2010.9663403
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    2. Richard Macve, 2010. "Conceptual frameworks of accounting: Some brief reflections on theory and practice," Accounting and Business Research, Taylor & Francis Journals, vol. 40(3), pages 303-308.
    3. Zhang, Jingwen, 2017. "The adaptation of management control systems to different agents," Other publications TiSEM 647192e2-8d0d-4265-8bc1-d, Tilburg University, School of Economics and Management.
    4. Fernando Juárez, 2015. "The Accounting Equation Inequality: A Set Theory Approach," Global Journal of Business Research, The Institute for Business and Finance Research, vol. 9(3), pages 97-104.
    5. Carien van Mourik & Yuko Katsuo Asami, 2018. "Articulation, Profit or Loss and OCI in the IASB Conceptual Framework: Different Shades of Clean (or Dirty) Surplus," Accounting in Europe, Taylor & Francis Journals, vol. 15(2), pages 167-192, May.
    6. Christoph Kuhner & Christoph Pelger, 2015. "On the Relationship of Stewardship and Valuation—An Analytical Viewpoint," Abacus, Accounting Foundation, University of Sydney, vol. 51(3), pages 379-411, September.
    7. Wolfgang Ballwieser, 2014. "Ansätze und Ergebnisse einer ökonomischen Analyse des Rahmenkonzepts zur Rechnungslegung," Schmalenbach Journal of Business Research, Springer, vol. 66(5), pages 451-476, August.
    8. Dinu Elena Loredana, 2022. "The concept of quality of financial accounting information and the relationship with IFRS standards: analysis of the situation of companies listed on BVB," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 16(1), pages 1353-1367, August.
    9. Yong, Kevin Ow & Lim, Chu Yeong & Tan, Pearl, 2016. "Theory and practice of the proposed conceptual framework: Evidence from the field," Advances in accounting, Elsevier, vol. 35(C), pages 62-74.
    10. Axel Haller & Chris J. van Staden & Cristina Landis, 2018. "Value Added as part of Sustainability Reporting: Reporting on Distributional Fairness or Obfuscation?," Journal of Business Ethics, Springer, vol. 152(3), pages 763-781, October.
    11. Günther Gebhardt & Araceli Mora & Alfred Wagenhofer, 2014. "Revisiting the Fundamental Concepts of IFRS," Abacus, Accounting Foundation, University of Sydney, vol. 50(1), pages 107-116, March.
    12. McCallig, John & Robb, Alastair & Rohde, Fiona, 2019. "Establishing the representational faithfulness of financial accounting information using multiparty security, network analysis and a blockchain," International Journal of Accounting Information Systems, Elsevier, vol. 33(C), pages 47-58.

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