ETHICS AND CONCEPTUAL FRAMEWORK PAPER

There are two major philosophies in accounting consisting of a principles-based system for accounting and a rules-based system for accounting. The following discussion will speak about these two philosophies and will define one as being a best fit for encompassing the role of ethics and the conceptual framework. The conceptual framework was established by the Financial Accounting Standards Board (FASB) and is used to help define the boundaries of accounting. It gives definitions of key terms and establishes consistent standards by which fundamental issues are defined.

This makes it easier to facilitate discussion and leads to greater efficiency in making accounting judgments. The framework plays a major role in supporting the development of accounting standards used for neutral information, which is then used to make informed investment decisions, benefiting the public.

The goal is to reduce the influence of personal biases and to give a fair