The conceptual framework, accounting principles and what we believe is true

Abstract

What we have been taught doesn't matter, what we believe is true, is apparently the view shared by many accountants (and accounting students!) when it comes to the conceptual foundations of accounting. Some misconceptions regarding some of these issues are explored with reference to the conceptual foundations of accounting and the role and function of the conceptual framework. An attempt is made to bring some context to a much-neglected area of accounting education, probably resulting in a fairly high degree of ignorance amongst average accountants regarding conceptual issues. Since "principles" are essentially a theoretical construct formulated within the context of a specific philosophical approach and certain taxonomical imperatives, a body of theory underlying the framework is assumed. Such body of theory is seldom studied by accountants and scantily taught by South African universities, yet "principles-based" standards are issued, discussed, criticised and applied. A number of observations are made regarding the nature and formulation of theories in general, followed by a brief overview of accounting theory in particular.