At Lunch Recently, Two Accountants Were Discussing the Merits of the FASB's

question 85

Essay

At lunch recently, two accountants were discussing the merits of the FASB's conceptual framework project, which resulted in the publication of seven Statements of Financial Accounting Concepts and required more than ten years of effort.One accountant thought the effort was a waste of resources, since accounting was unlike physics, chemistry, and biology, where natural laws apply.The other accountant thought the effort was very valuable.He stated that "accounting, like any other discipline, benefits from having a coherent theory."
Required:
Write a brief essay that discusses the advantages that are derived from the existence of a conceptual framework for financial accounting and reporting.

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Definitions:

P < .05

A statistical notation indicating that the probability of the observed results occurring by chance is less than 5%.

Effect Size

A quantitative measure of the strength of a phenomenon, often used to determine the practical significance of research findings.

Cohen

Refers to statistical measures developed by Jacob Cohen to quantify the effect size or the strength of an observed phenomenon, such as Cohen's d.

Cohen's D

A gauge for quantifying the size of impact by showing the normalized discrepancy between two mean values.