ICAEW and ACCA have added their voices to calls for the International Accounting Standards Board (IASB) to re-introduce the concepts of prudence and accountability in its proposed new framework for financial reporting, and also want the IASB to do more work around the reporting of profit or loss.

Richard Martin, head of corporate reporting at ACCA said: 'This framework is important as it helps the IASB prepare, develop and revise IFRS in a coherent and consistent way. While accountability is referred to in the Framework, and prudence is built into the existing IFRS in a number of ways, both need to be given more importance in the framework.'

In its response to the consultation, which closed yesterday, ICAEW challenged the way in which various items are excluded from profit or loss and recognised instead in 'other comprehensive income' (OCI).

Dr Nigel Sleigh-Johnson, head of ICAEW's financial reporting faculty, said: 'At the moment there is no clear and consistent basis for this. If the IASB were to explain the objective of presenting a figure for profit or loss, it would be clearer what the number means and - importantly - easier to decide what should be recognised in profit and what should go to OCI.'

ACCA said that more needed to be done to develop definitions and principles in this area. Its feedback highlighted other gaps in the framework where the institute said no concept or principle seems to be included - such as on the unit of account issue, de-recognition and disclosures.

Martin said: 'This is an unsatisfactory situation where important aspects of setting accounting standards are missing. We also need a more coherent definition of liabilities that brings together the approach to conditional liabilities, constructive liabilities and the implications of economic compulsion.'

The IASB's discussion paper provides the basis for the first comprehensive revision of the conceptual framework since it was published in 1989, and Sleigh-Johnson said that future revisions should be undertaken more frequently.

'Changes may not always be substantial, but the framework has to evolve with developments in business, markets, technology, the regulatory framework and accounting thought. The challenge here is to provide a balance between providing enough guidance to be helpful on specific issues and avoiding excessive detail. The framework should offer guidance; it should not be a straitjacket,' Sleigh-Johnson said.