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HI6025 Accounting Theory and Current Issue

01 / 10 / 2021 Assignment

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 Read the following quotation from Miller and Reading (1986, p. 64). If
constituency support is necessary before particular accounting approaches
become embodied in accounting standards, does this have implications for
the ‘neutrality’ and ‘representational faithfulness’ (qualitative characteristics
that exist in various conceptual framework projects around the world) of
reports generated in accordance with accounting standards?  
Theory and Current Issue  
“The mere discovery of a problem is not sufficient to assure that the Financial
Accounting Standards Board will undertake its solution … There must be a
suitably high likelihood that the Board can resolve the issues in a manner that
will be acceptable to the constituency—without some prior sense of the
likelihood that the Board members will be able to reach a consensus, it is
generally not advisable to undertake a formal project”.

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