Conrado Valix, Jose Peralta, and Christian Valix defined Conceptual Framework on

their book Financial Accounting Volume 1(2009 Edition) as an attempt to provide an overall
theoretical foundation for accounting which will guide standard-setters, preparers and users of
financial information in the preparation and presentation of statements. It is the summary of terms
and concepts that underlie the preparation and presentation of financial statements. Conceptual
Framework plays an important role because it serves as the recipe or a blueprint in accounting.

It serves as a recipe or a blueprint because it helps to better understand accounting

information and gives a basis for choosing the most appropriate or most applicable accounting
treatment permitted by financial accounting standards. Recipe, defined by Collins dictionary as a
list of ingredients and a set of instructions that tells you how to cook something. Just like a recipe,
conceptual framework tells us how financial statements are constructed and that it provides a
platform from which accounting standards are developed. On the other hand, vocabulary.com
defined blueprint as a guide for making something — it's a design or pattern that can be followed.
Conceptual framework are used in order to serve as a guide for auditors in forming an opinion as
to whether Financial Statements conform to Philippine GAAP. It is really important because it
helps the Financial Reporting Standards Council (FRSC) in its review and adaption of IFRS,
helps users of financial statements in interpreting the information contained in the financial
statements, assists prepares of financial statements in applying accounting standards and in
dealing with issues not yet covered by GAAP and assists the FRSC in developing accounting
standards that will represent Philippine GAAP.
Conceptual Framework plays a vital role to the users of information mainly the
investors, lenders, employees, creditors and suppliers, customers, government agencies and to
the public because they are the ones who needs to check the financial statements of the company
that they will trust. Since you will invest your money to a specific company you should always
check first if their performance is good and worth investing and/or lending for. It is needed to
help them determine if they will sell, buy or hold the shares. Employees and their representative
groups are also interested in the stability and profitability of their employees and the information
that enables them to assess the ability of the company to give retirement benefits, employment
opportunities and remuneration. It also enables lenders to make sure that their loans and interest
will be paid when due. Thanks to the use of conceptual framework there is a basis of making
financial statements useful for the users of information.

Conceptual Framework is really important in many aspects because it helps in

creation and interpretation of financial statements easier and serves as a recipe or blueprint in
accounting. 

References:
1. Valix, C, Peralta, J, Valix, C (2009). Financial Accounting Volume 1.
C.M Recto: GIC Enterprises and Co., Incorporation
2. https://www.collinsdictionary.com/dictionary/english/recipe
3. https://www.vocabulary.com/dictionary/blueprint