Identify the Eight Major Components of the Conceptual Framework for Accounting

question 3

Essay

Identify the eight major components of the conceptual framework for accounting. Explain how these components interact with the demand for and supply of financial information.

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Definitions:

Self-Serving Bias

A common tendency for individuals to attribute their successes to internal factors while attributing failures to external factors.

Cognitive Biases

Misperceptions or misunderstandings that cause systematic errors. Most result either from heuristics that are prone to systematic errors or because the brain is attempting to solve a type of problem (such as a calculus problem) for which it was not evolutionarily evolved and for which it has little innate capability.

Confirmation Bias

The tendency to search for, interpret, favor, and recall information in a way that confirms one's preexisting beliefs or hypotheses.

Behavioral Economists

Researchers focusing on the impact that psychological, cognitive, emotional, cultural, and social elements have on the economic decisions of individuals and organizations.