Financial Accounting

Directions: Write 1 response to each Discussion. There will be a total of 2 responses. Eachresponse needs to be 1 to 2 pages. Use 2 to 3 peer-reviewed sources for each response.
Review the discussion 2 posts below. Specifically, focus on the information
provided in prompts 1 & 2. Provide an assessment of the information provided
by your peers for prompts 1 & 2. Consider the following questions as you do so:
1. Does the information presented make sense to practitioners?
2. Is there a transparent bridge between a potential research
framework and practical application within the organization?
3. Are there other implications that should be considered that were not
addressed by your peers?
Discussion #1
Conceptual Framework
Definition
A conceptual framework establishes guidelines for shaping a research inquiry and discovering
fitting, significant solutions. It interlinks the theories, assumptions, beliefs, and ideas guiding your
research and portrays them visually, graphically, or narratively. This framework forms a connection
between the dependent and independent variables, factors, and other principles influencing the
organization of your study (Sachdeva, 2023).
Importance
A robust theoretical basis is vital for accounting practices to adapt to evolving business
landscapes. Accountants constantly encounter novel scenarios, technological progress, and business
advancements, leading to fresh accounting and reporting challenges. Addressing these issues requires a
systematic and coherent approach (MyEducator). The conceptual framework facilitates the methodical
adjustment of accounting standards to suit a dynamic business setting. FASB utilizes this framework to
support structured and uniform formulation of new accounting standards. Furthermore, familiarizing
oneself with FASB’s conceptual framework enables comprehension and potentially foresight of future
standards (MyEducator).
Prompt 1: Explain how a Conceptual Framework of Financial Reporting can be applied within an
organization you currently work with or have worked with and can lead to increased
organizational effectiveness.
A conceptual framework of financial reporting is helpful in most scenarios. One scenario within
an organization I previously worked at could have benefitted from adopting a conceptual framework
when choosing a new enterprise solution for customer relationship management software. A component
of the legacy software included time keeping and reporting which was integral to payroll processing.
There were many other features involved in the decision making process mainly centered around the
customer and employee usability. In the end, the company went with a software that did not include time
reporting measures but did answer a lot of the other issues that were needing to be upgraded. They ended
up needing to pay for a new software to track time keeping which then forced employees to use two
separate softwares to clock in and also track tasks.
Prior to making the decision to move softwares a conceptual framework would have been helpful
to determine what the overall goal of this change was. Most of the information and reasoning would come
in from suggestions from employees in various forms with no defined process or parameters. After the
fact of adopting two softwares, a conceptual framework could have further helped with organizational
effectiveness by establishing a process for accurate time reporting and issues arising from both software
providers.
Prompt 2: How can Conceptual Frameworks based on scholarly research be applied to
organizations from a practical perspective? Provide an example.
One example of developing a conceptual framework to be applied for organizations from a
practical perspective is understanding change purpose. Naslund and Norman created a conceptual
framework around this topic of understanding change purpose. The study outlines a clear framework
which includes defining relevant, justified, urgent, and clear goals. Once this requirement is met, through
established communication channels the change purpose is supported, prioritized, and aligned in context
with the organization (Naslund and Norman, 2022).While this example gets into more thorough details
and illustrates this framework, they also recognize the fact that no change is absolutely predictable. The
beauty of the framework allows for organizations to interpret it however they see fit given their lifecycle
of change. I found this point to be very helpful when studying the concept of a conceptual framework.
Even though they are very intentionally created and tested for a specific purpose, rarely are they used
from beginning to end. We are not able to predict the exact direction of an organization because we all
operate in an imperfect world.
References
MyEducator – a conceptual framework of accounting.
(n.d.). https://app.myeducator.com/reader/web/1560e/chapter01/c241s/
Naslund, D., & Norrman, A. (2022). A Conceptual Framework for Understanding the Purpose of
Change Initiatives. Journal of Change Management, 22(3), 292–320.
https://doi.org/10.1080/14697017.2022.2040571
Sachdeva, V. (2023, August 28). What is a conceptual framework?. AJE.
https://www.aje.com/arc/what-is-a-conceptual-framework/ August
Discussion 2
A conceptual framework is a method tool used to analyze information in such a way as to
visualize the expected interplay between variables as well as a guideline for the concepts
that present the derivation of that information in research (Peasnell, 1982). If research is
used to gain knowledge, a question needs to be asked. This is the first element of a
conceptual framework (Dean, 2003). That question should be directed to specific
variables, specifically independent and dependent variables. The answer to that question
might be how behaviors of an independent variable affects a dependent variable. This
cause-and-effect relationship is another element of a conceptual framework (Dean,
2003). There are other variables that need to be considered upon construction of the
conceptual framework, such as control variables, as the research visualization is aimed at
answering a specific question to move the needle of societal knowledge (Peasnell, 1982).
The visualized model of a conceptual framework appears somewhat as a flow chart. A pot
of water could be the initial variable. When heat is added as the next item, a reaction can
be observed of boiling water, the expected reaction. But there is more to it than that: the
heat temperature, the amount of water, the length of time of exposure, what the pot is
made of, and so on. These additional elements of conceptual framework design are more
easily grasped through this visualization (Dean, 2003). It is the consideration of these
variables and controls that allows a conceptual framework to be used as a tool (Dennis,
2018). In terms of a conceptual framework design for financial reporting, the visualization
or standardization could be used in decision-making processes to allow for optimization of
organizational social responsibility (Dennis, 2018).
Organizationally, a conceptual framework not only optimizes information availability for
decision-making, but it also deters misinformation. At Workforce Safety & Insurance
(WSI) during the infancy of the COVID-19 pandemic, about 90% of workers went to a
remote schedule. However, printing paper consumption within WSI and on our financials
decreased by only 1%. With the assistance of a conceptual framework, it was easily
dissected that another variable was in play, the confounding variable was that paper
consumption is not impacted by the presence of workers. Remote workers still generate
letters that are printed within the building and metered and mailed, which accounts for
about 96% of the total paper consumption pre and post pandemic. There was no causal
relationship of substance between the presence of workers and paper consumption.
That is the real value of a conceptual framework to an organization, saving time-wasting
expeditions rooted in false premises. This accomplishes an increase to organizational
effectiveness while being practical. Rather than bringing an auditor to track the leak,
transparent financial reporting allowed WSI to simply move on in fulfillment of
purpose. WSI’s purpose is to care for injured workers. Part of that care is maintaining
solvency to ensure future medical liabilities can be paid, so controlling expenses is a part
of that purpose. The purpose of WSI is not to maintain solvency, the solvency is a
biproduct of the stated perpetual purpose of caring for injured workers.
Organizational effectiveness is not solely impacted by a reduction of misinformation, but
the opposite is also true; it can be increased through employee behavioral modification
from past mistakes. Consider a mistake from an employee that leads to a behavioral
switch to not make it again, so they alter what the perceived malady was when exposed to
it again. However, much like the confounding variable in the paper example, that
perceived malady may not be rooted in reality. So, the mistake can occur again and again
unless and until a conceptual framework is applied to find the causal relationship that
results in the desired outcome.
References
Dean, G. W., & Clarke, F. L. (2003). An evolving conceptual framework?. Abacus, 39(3),
279-297.
Dennis, I. (2018). What is a conceptual framework for financial reporting?. Accounting in
Europe, 15(3),
374-401.
Peasnell, K. V. (1982). The function of a conceptual framework for corporate financial
reporting. Accounting and Business Research, 12(48), 243-256. Osten