One of the most fundamental differences between the two comprehensive bases of accounting is the role of the Conceptual Framework. As discussed earlier, their frameworks are very close and they are progressively moving towards a joint framework. However, in the US the role of the framework is to help the standard-setters set consistent standards, whereas for the IASB the framework plays that role but is also to be used by preparers and auditors to guide them in shaping an accounting policy when none exists in the standards.
The Conceptual Framework originated in the US and came out of a process of reform that was based in part on a perception that standards were inconsistent and were framed to help the audit firms. Up until 1973 standard-setting in the US was done by the overall professional body, the American Institute of Certified Public Accountants. Accounting scandals in the late 1960s led to a call for reform and the production of better standards. The answer was thought to be the creation of an independent standard-setter (the FASB) and a requirement that it should write standards that were consistent with an as yet only sketched out conceptual framework.
The FASB framework was elaborated from those reforms but as an instrument to serve only standard-setters who would write standards that gave effect to the objectives, etc., of the framework. Preparers and auditors would follow the standards. In the last few years the FASB has changed the way it structures ...