Taxation Essay Example | Topics and Well Written Essays - 2750 words - 2

Taxation - Essay ExampleThe conceptual framework of accounting holds accounting theories link to taxation together. The framework establishes goal and objectives of fiscal reporting by businesses. Financial accounting information provides usable information for making business and economic decision such as taxation (Riahi-Belkaoui, 2005, p. 121). The theory that financial reporting should avail significant information for taxation recognizes that reporting does not exist out of the legal, economic, political, and neighborly environment. The conceptual framework of accounting ensures that accounting information in relation to taxation is relevant, comparable, reliable, and consistent (Bebbington, greyness & Laughlin, 2001, p. 97). Comparability and consistency of taxation benefit from havingGenerallyAccepted Accounting Principles (GAAP). Adhering to financial statements to GAAP in relation to taxation means, they atomic number 18 consistent from year to year and the tax differen ce between sundry(a) companies can be compared. Therefore, the accounting theories help in practical analysis of taxation in a business.The accounting theories of taxation function on four assumptions. The economic entity assumption illustrates that the practices of a business are distinct from the actions of the owner. It means that tax is computed separately for the companys profit generation. In addition, the income tax of an employee is distinctively calculated in relation to the amount of salary gained. The going concern assumption states that when financial statements are prepared, the accountant assumes that the company will move without threat of dissolution or bankruptcy (Riahi-Belkaoui, 2005, p. 97). Therefore, it means that the belike taxable amount is already catered for in the financial statements hence in the event of taxation, the business does not feel any