Report: Problem Based Learning, Conceptual Frameworks

What is a Conceptual Framework?

Prior to the formation of the Accounting Standards Board (ASB) in 1990, UK accounting standards were developed in response to specific issues or problems. The Association of Chartered Certified Accountants text Financial Reporting UK (2006) refers to this ad-hoc approach as fire fighting and identifies a number of weaknesses with this method. These are as follows:

- As accounting standards are developed separately and at different times they are not always consistent with each other.

- Many accounting standards had their roots in manufacturing companies and as such do not reflect modern developments and business practices.

- They were not effective in dealing with complex financial reporting issues such as intangibles and complex contractual arrangements.

- Accounting standards did not reflect international developments in financial reporting.

When the ASB was formed they developed their Statement of Principles for Financial Reporting which was released in 1999. This effectively formed a conceptual framework, a term described as "a constitution, a coherent system of interrelated objectives and fundamentals that can lead to consistent statements and that prescribes the nature, function and limits of financial accounting and financial statements" in Financial Reporting UK (2006). The ASB refers to its Statement of Principles as describing "the accounting model that it uses as the conceptual underpinning for its work". It continues to say that it outlines the standard-setter's views on:

The activities that should be reported on in financial statements;

The aspects of those activities that should be highlighted;

The attributes that information needs to have if it is to be included in the financial statements; and

How information should be presented in those financial statements.

So it can be seen that a conceptual framework is not an accounting standard in itself, however, it influences accounting practice by guiding the standard-setting process.

It is interesting that whilst the ASB states that it drew heavily on the International Accounting Standards Committee's "Framework for the Preparation and Presentation of Financial Statements" in creating its framework, differences do exist. This point will be considered later in the report.


This is a well-structured, succinct piece of writing demonstrating an ability to summarise, to report, to define, and to explain. It shows an understanding of the material presented with good use of bullet points for clarity and visual style. The structure and organisation of the written material is appropriate for the type of writing.

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Quality: Structure

The use of headings throughout the report is helpful to the reader, showing clearly the way in which the writing has been organised. Questions as headings can be a good way of demonstrating that the writer has addressed the essay question, or a series of sub-questions building to a strong argument.

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The use of a bulleted list is good practice in report writing. It enables the reader to see clearly the information presented and avoids excessive use of signposting such as "first", "second" etc. Make sure bulleted points are consistent with one another, e.g. in this case each point is one sentence with a capital letter and full stop.

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Again a bulleted list is used to present information clearly and succinctly. This time the bullet points are written out as a sentence with clauses separated by semi-colons, and an "and" and a full stop for the last clause. However, capital letters are still used for stylistic reasons.

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This sentence ensures that there is continuity in the report. To enable the reader to cross-reference material it would be even better if the section of the report where this is discussed were identified explicitly.

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Function: Describe

This is a general opening sentence about the UK regulatory framework and standard setting process which places the topic in context.

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These sentences are important as they introduce and define the term "conceptual framework", which is the topic addressed under this sub-heading.

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Quality: Authority

There is authority here to support the weaknesses identified by the writer. Note that even though this is not a direct quote the textbook that is the source of the information has been acknowledged.

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The use of direct quotes to support the definition lend authority. However, as there are two quotations from the same source, page numbers could be included to help the reader navigate what is obviously an important source document.

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Function: Analyse

A clear sentence that summarises the previous paragraphs by refuting a possible misconception and offering a more useful definition.

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Quality: Voice

This phrase tends to be over-used in student writing. However, in this case the writer is drawing attention to something that is genuinely interesting because it is surprising, and because it opens up a whole new area of discussion.

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