Why is accounting said to be ‘political’ in nature? How can a conceptual framework help in the setting of accounting standards in a political environment?
Why is accounting said to be ‘political’ in nature? How can a conceptual framework help in the setting of accounting standards in a political environment?
The concept of accounting was developed to record the economic transactions of the business with the motive of transparency between the owners & management of the business. Then, it is developed as a tool of transparency, compliance & decision-making for both types of users, i.e internal users and external users.
The internal users of the accounting information are : owners, management and employees. While the external users are : Suppliers, Banks & Financial Institutions and government, etc. The different usage of accounting information make it a science with a required conceptual framework.
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