time the growing dissatisfaction with the increasingly apparent limitations of classical revenue-expenses matching gave rise to another shift. This where the development of a conceptual framework by United States, specifically, the Financial Accounting Standard Board (FASB) concept statements developed in the mid 1970s placed emphasis on reasoning within economic substance definition of asset and liabilities and this framework significantly influenced the International Accounting Standard Committee (IASC) in developing a conceptual framework. Conceptual framework is a coherent system of interrelated objectives and fundamentals that is expected to lead to consistent standards and that prescribes the nature, function and limits of financial accounting and reporting (Financial Accounting Standard Board). Required: a. Justify how a conceptual framework can be considered as a theory and how important is theory to accounting practice? (10 marks) b. From the above statement, discuss the role of the accounting conceptual framework especially in improving the credibility of financial reporting. (10 marks) c. Do you think the IASB conceptual framework which is followed closely by MASB has too narrow a focus on responsibility of the reporting entity? Justify.