A.Discuss the goals and objectives of
i.The Conceptual Framework Project (CFP)
The Conceptual Framework Project was developed by the FASB to develop concepts
useful in guiding the Board in establishing standards and in providing a frame of
reference for resolving accounting issues. The goal of CFP was to create a sound
foundation for future accounting standards that are principles-based, internally consistent,
and internationally converged. The FASB intends the CFP to be viewed as a basis for
identifying and discussing issues, for asking relevant questions, and for suggesting
avenues for research. The CFP reduces the influence of personal bias on standard-setting
and also help users of financial information better understand that information and its
limitations.
ii.The Emerging Issues Task Force
The goals and objectives of the Emerging Issues Task Force (EITF) are to assist the
FASB in improving financial reporting through the timely identification, discussion, and
resolution of financial accounting issues. The EITF was intended to implement a guide
within the framework of the Accounting Standards Codification to reduce diversity in
practice on a timely basis and also to minimize the need for the FASB to spend time and
effort addressing narrow implementation, application, or other emerging issues. “The
EITF is a team of strong players dedicated to assisting the FASB in identifying and
resolving emerging issues and implementation problems” (Granatowski, 1988).
B.Discuss the standards overload problem.
One of the most controversial issues in the accounting profession over the years has been
“standard overload”. The term “standard overload” is one that has been used off and over the
years by the FASB’s various constituent groups to describe their concerns about not only the
volume of accounting rules and the level of complexity and detail of those rules, but also the
resulting profusion of footnote disclosures and the difficulty of finding all the accounting rules
on a particular subject. This controversy has arisen because the current accounting standards
apply to all companies with no distinction being made between small and large companies. The
FASB board is working to simplify the complexity with various projects. One project is
attempting to write the rules and regulations in a more simple, clear manner, hoping to lose much
References:
FASB, financial accounting standards board. (n.d.). Retrieved March 27, 2021, from
https://www.fasb.org/project/standards_overload.
Granatowski, A. D., (1988) The Emerging Issues Task Force of the Financial Accounting Standards
Board: Its Role and Influence in Setting Standards for the Accounting Profession
of the complexity. The disclosure overload is being addressed too in an attempt to simplify the
financial disclosures to make financial statements easier to understand. A third project is the
continuation of the codification project, increasing the amount of information that is available.
Biblical Application
As a moral believing creature, we need rules and regulations in order to protect the individuals,
but if the rules and regulations are not well thought out, it can favor some and hurt the other. The
bible tells us that the plans of the diligent lead surely to abundance, but everyone who is hasty
comes to poverty (Proverbs 21:5). Rules and regulations that are align with biblical principle will
lead to prosperity. In this case, the FASB is trying to solve the accounting issues and I hope they
come up with rules that will benefit both small or large companies.
Schroeder, R. G., Clark, M. W., & Cathey, J. M. (2020). Financial accounting theory and analysis: Text
and cases (13th ed.). Hoboken, NJ: Wiley. ISBN: 9781119577775.
