Chapter 2 Discussion - ? ?

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What are some of the costs of providing accounting information? What are some of the benefits of  accounting information? Describe cost-benefit factors that should be considered when new accounting  standards are being proposed.     The costs of providing accounting information are paid principally to vastly trained accountants who  design and implement information systems, reclaim and investigate large amounts of data, prepare financial  statements in accordance with authoritative pronouncements, and audit the information presented. These  activities are time-consuming and costly.  The benefits of providing accounting information are experienced by society in general, since informed  financial decisions help allocate scarce resources to the most effective enterprises. Occasionally new  accounting standards require presentation of information that is not readily assembled by the accounting  systems of most companies. A determination should be made as to whether the incremental or additional  costs of providing the proposed information exceed the incremental benefits to be obtained. This  determination requires careful judgment since the benefits of the proposed information may not be readily  apparent. Food for thought question #3: Describe the usefulness of a conceptual framework. What is it, How FASB's efforts has helped to construct a  conceptual framework? A conceptual framework is coherent system of interrelated objectives and fundamentals that can lead to  consistent standards and that prescribes the nature, function, and limits of financial accounting and financial  statements. A conceptual framework is necessary in financial accounting for the following reasons: 1.    It will enable the FASB to issue more useful and consistent standards in the future. 2.    New issues will be more quickly soluble by reference to an existing framework of basic theory.
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This note was uploaded on 12/13/2009 for the course ACCOUNTING ACC 100 A taught by Professor A during the Fall '09 term at University of Phoenix.

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Chapter 2 Discussion - ? ?

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