The Conceptual Framework: Not Definitions, But Professional Values.

Abstract This article discusses issues regarding the conceptual framework of the U.S. Financial Accounting Standard Board (FASB). Suffice it to say that accounting is now painfully self-conscious about the intellectual standing of its reasoning process. Just how painful is evidenced by the sizable chunk of the board's multimillion-dollar budget that was spent on the conceptual framework. For better or for worse, the accounting profession seems irrevocably committed to undergirding its standards with the strongest or at least the most expensive methodological foundation that money can buy. Yet, as the dust settles around what seems to be the completed conceptual framework, there is an unmistakable sense of disappointment with what the profession got for its money. Lee Seidler spoke for many when he dismissed the draft of what later became FASB Concepts Statement Number 5 as doing nothing but consuming paper and words. Not a few among Seidler's fellow accountants would apply that description to the conceptual framework as a whole. There is no shortage of explanations for this disappointment. The FASB itself sought to blame it on false hopes that the conceptual framework would produce instant, indisputable answers. Moreover, Seidler countered with the contention that there simply are no conceptual frameworks in the social sciences. The idea that the FASB could develop one merely demonstrates the vanity of ignorance. Still others are likely to contend that accounting already had all the conceptual framework it could use, that all the FASB did was give new expression to old ideas. While each of those explanations no doubt has merit, they miss the fundamental error of the conceptual framework: the mistaken notion that it is possible to avoid, minimize, or control debate on basic issues by prior agreement on abstract principles.