The proposal by the Financial Accounting Standards Board (FASB) in 2002 to produce principles‐based accounting standards is an explicit commitment to use its conceptual framework to improve financial accounting. In effect, it is a proposal to assist accounting for economic reality. However, an evaluation of the proposal and related FASB communications reveals a global strategy more concerned with achieving comparability and consistency than identifying improved ways of recognizing and representing socially‐constructed reality by accounting numbers. The paper examines the philosophical notions of social reality and truthful correspondence in light of principles‐based accounting standards and suggests that the FASB's superficial use of its conceptual framework in this respect is consistent with a history of conceptual frameworks as means of legitimating standard setting activities. As such, the FASB proposal would be no more than a short‐term palliative to the long‐term ills of financial accounting world‐wide. The paper recommends a better understanding of the construction and representation of social reality by all concerned with the world of financial accounting.

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