The Dilemma: Push-Down Accounting and the Conceptual Framework of Financial Accounting: A Case of Contradictions between Relevance and Reliability

Al-Adeem, Khalid Rasheed

doi:10.13189/ujaf.2023.110101

Cited by 3 publications

(4 citation statements)

References 22 publications

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“…Even the conceptual framework for financial accounting that the Financial Accounting Standards Board (FASB) constructed was deemed the most protracted and most expensive accounting project ever (Gore, 1992;Bryer, 1999) and needed to improve to function as a meta-theory for corporate reporting and accounting. Although the approach of the FASB's conceptual framework has been imitated and replicated in parts of the world-for example, the Saudi Organization for Certified Public Accountants (SOCPA) (Almoghaiwl, 2003;Alhomaid, 2009;Al-Adeem, 2020a), Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) 9 (Al-Adeem, 2020a), and the framework that the International Accounting Standards Board (IASB) developed to guide accounting practices-the FASB's conceptual framework has not been without issues and nor has it been rigorous and interrelated enough (e.g., Sterling, 1982;Anthony, 1983;Power, 1993;Miller et al, 1995;Macve, 1997;Zeff, 1999;Vorster, 2007) to become a complete (Belkaoui, 2004;Al-Adeem, 2023b) theory for financial accounting (Gaa, 1988;Wolk et al, 2004), which leaves questions open for research (Zeff, 1999). The challenge of internationalizing the FASB's conceptual framework (Al-Adeem, 2020b;Anthony, 1983;Belkaoui, 1995;Gambling & Karim, 1991;Karim, 2001;Solomons, 1986) means it is insufficient to become or substitute the accounting theory.…”

Section: Reconsidering the Enterprise Theory For Corporate Reportingmentioning

confidence: 99%

“…Undoubtedly, accounting is one of the best anthropological developments (Chambers, 1984) and the most trusted profession in the world (Moehrle et al, 2006, xxii, p. 6). Accounting has emerged in response to society's needs (Al-Adeem, 2017;2020a;2020b;2022a;Al-Adeem & Fogarty, 2010;Al-Hazzani & Al-Adeem, 2020;Anderson, 1977;Belkaoui, 1995;Boedker & Chua, 2013;Burchell et al, 1980;Chambers, 1960;1984;Chatfield, 1977;Cowan, 1968;DR Scott, 1926;Hatfield, 1924;Hopwood, 1987;Lehman, 2005;Littleton, 1966Littleton, /1981Merino, 1993; Montgomery as cited in Nelson, 1949;Vatter, 1963;Yamey, 1947). Adapting to new roles (Montgomery in the Foreword to Edward Peragallo's Origin and Evolution of Double Entry Bookkeeping, as cited in Nelson, 1949: 357) is the nature of accounting, and accounting continuity (Littleton & Zimmerman, 1962;Alshirazi, 1990) is assured by the malleable nature of the field.…”

Section: Introductionmentioning

confidence: 99%

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Accounting as a sustainable crafted technology for human exchange activities with nature: A defense of accounting continuity

Al-Adeem

2023

Front. Environ. Sci.

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The literature in the field of accounting establishes that accounting actively changes due to its adaptability to new roles and its fulfilling of functions that members of diverse societies have needed. While accounting is a means that has assisted humans in monitoring resources and holding delegated individuals who administer such resources accountable, it is, however, also being tested to account for human activities with nature. In practice, users of corporate reports need to be informed about the sustainability of the firms in which they invest. Inquiring about sustainability is understudied and experiences low voluntary disclosure. Since reporting on sustainability embraces financial and non-financial disclosure, this study brings to attention the enterprise concept that best fits the conceptualization of accounting at this current time, enabling the accounting profession to meet the urgent ecological, environmental, and social needs of society from reporting entities, primarily those entities whose beneficiaries are part of society. Accounting is the only tool that a business possesses to monitor its internal affairs, administer its external relations, and assess its performance. Adopting the enterprise theory enables accounting to maintain its superiority as a device that meets the emerging needs of business and society. In this regard, accounting is a sustainable profession, because it maintains its existence by assisting corporations in meeting the obligations that they owe toward members of their society and reporting the impact of their actions on members of society at large.

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Section: Reconsidering the Enterprise Theory For Corporate Reportingmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Accounting as a sustainable crafted technology for human exchange activities with nature: A defense of accounting continuity

Al-Adeem

2023

Front. Environ. Sci.

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“…Accounting research experienced a tradeoff between the two types (Al-Adeem [3]) creating a demand for a theoretical ground. Such a demand has been moved because to date, accounting has not developed its own theory [1][2][3]9,10,22,23,29,37,[42][43][44][45][46][47][48][49][50][51][52][53][54][55][56][57]. Virtually, a paradigm shift indicates a development in a science (Kuhn 1996).…”

Section: Viewing the Development Of Accounting Research Paradigmaticallymentioning

confidence: 99%

Understanding Professor Ross Watts by Applying Kuhnian Interpretation of Science Progress

Al- Adeem

2023

SIAM

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Professor Ross Watts identified an issue with corporate reporting. He wrote extensively alone and with others on the issue and proposed an accounting research methodology. The influence of economics from where he attended school is present in his views and writing. He played the role of a knight in shifting accounting research. While bridging the gap between accounting practice and research was one of the arguments was used to propagate Rochester School of Accountancy's positive accounting methodology, he (1983) testified that accounting research "has become more removed from the practitioner." We should learn from his passion and eagerness as we should learn that basing accounting research on a single foundation does not yield the outcomes that the accounting practice expects from research of accounting academics.

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“…It is the balance of matters. Strengthening the independence of the external auditor, even in the presence of Sikka et al, 1989Baker, 1993Mitchell et al, 2001;Sikka, 2001Sikka, , 2002 Al-Adeem, 2017a, 2017b, 2017c2019a, 2019b2019c;2021a;2021b;2023a, 2023b2023c;2023d;2023e;2024;Al-Adeem & Fogarty, 2010;Alharbi & Al-Adeem, 2022;Al-Hazzani & Al-Adeem, 2020;Alhomaid, 2009;Alshiban & Al-Adeem, 2022;Beaver, 2002;Belkaoui, 2004;Brearey, & Al-Adeem, 2019;Chatfield, 1977;Coetsee, 2010;Gaffikin, 1987;García, 2017;Ijiri, 1967;King, 2006;Lee, 2009a;Statement on Accounting Theory and Theory Acceptance (SATTA) , 1977 Bayou et al, 2011;Briloff, 1966Briloff, , 1981Chambers & Wolnizer, 1991;Cowan, 1965;Conway, 2020;Hines, 1988;Houghton, 1987;Kirk, 2008;Lee, 2006aLee, , 2006bLee, , 2009b…”

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confidence: 99%

Auditing Corporate Reports and Financial Statements Externally: Truth or Mirage

Al-Adeem

2024

IJFAES

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The separation of ownership and management in the corporate model resulted in the need for an external party to certify the representation of the financial statements prepared by the corporation’s executive management of its financial position and the financial, cash and operational performance of its executive management. The existence of the corporation whose shares are traded in the market and stock exchanges also resulted in the emergence of a class in society, lurking for price fluctuation. Accounting has founded a concept that it is the servant of every rational decision maker. However, the concept of 'decision makers' in accounting is imaginary. Financial accounting has not been able for more than a century and until our present moment to provide a model for the financial statements and reports that the corporation is required to prepare and publish in response to their so-called needs of its financiers. The financial statements are prepared based on financial accounting standards, which represent the contemporary accounting truth. Such truth is impossible and is not a reflection of the economic reality on which the accounting entity is constructed. The external auditor’s approval of the corporate financial statements prepared by its executive management makes him its partner in preparing the financial statements and reports. What gives value to the opinion of the external party is his possession of the technical knowledge that gives him an advantage over the rest of the members of his society, and his independence from the executive management is the foundation of his work and professionalism. However, academic research in accounting and auditing casts doubt on the objectivity of the external auditor and even his ability to be independent, as their relationship is closer to cooperation than to opposition, representing the interests of the party absent from the contractual relationship between them. External auditing is the only profession whose practitioner must monitor whom he receives his fees in service to watch the interest a part that is absent in the contractual relationship. The external auditor does not provide the service of auditing the financial statements and reports of corporations as a community or voluntary service, but rather it is a service in exchange for covering his expenses and achieving a source of income. Also, work skills and dealing with the audit firm’s clients are of great importance in the audit firm, and leadership. Reliance on the one-partner model in implementing audit engagements is a source of risk. The external auditor is a product of his society. The doctrine that his society follows is his belief, and it is what affects his decisions. It is the balance of matters. Strengthening the independence of the external auditor, even in the presence of legislation, is not sufficient for the independence of the mind of the external auditor.

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The Dilemma: Push-Down Accounting and the Conceptual Framework of Financial Accounting: A Case of Contradictions between Relevance and Reliability

Cited by 3 publications

References 22 publications

Accounting as a sustainable crafted technology for human exchange activities with nature: A defense of accounting continuity

Accounting as a sustainable crafted technology for human exchange activities with nature: A defense of accounting continuity

Understanding Professor Ross Watts by Applying Kuhnian Interpretation of Science Progress

Auditing Corporate Reports and Financial Statements Externally: Truth or Mirage

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