Document Type : Research Paper
Authors
Abstract
A conceptual framework of accounting can be decision based or accountability based. The choice critically affects the resulting framework.
A framework that is decision based is centered on the decision maker, namely, the user of accounting information. Suppliers of accounting information might as well be inanimate objects since their interest in the now of information is not considered in this type of frameworks.
A framework built on the accountability relation, on the other hand, focuses on the relation between the accountor, the supplier of the accounting information, and the accountee, the user of the accounting information.
In a decision-based framework, the objective of accounting is to provide information useful for economic decisions. It does not matter what the information is about. More information is always preferred to less as long as it is cost effective. Subjective information is welcome as long as it is useful to the decision maker.
In an accountability-based framework, the objective of accounting is to provide a fair system of information now between the accountor and the accountee. It is built upon the accountability relationship between the two parties. Based on the underlying accountability relation, the accountee has a certain right to know, at the same time, the accountor has a right to protect privacy. More information about the accountor is not necessarily better. It is perhaps better from the standpoint of the accountee the not necessarily from the overall accountability relation. Subjective information can seriously damage the interest of the accountor, even if it is highly useful to the accountee.
Most conceptual frameworks seem to be decision based. They are unidirectional- oriented solely toward user. A conceptual framework that is accountability based must weigh the interest of the two sides; it is bidirectional.
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