Implications for GAAP from an analysis of positive research in accounting

Abstract

Based on extant literature, we review the positive theory of GAAP. The theory predicts that GAAP's principal focus is on control (performance measurement and stewardship) and that verifiability and conservatism are critical features of a GAAP shaped by market forces. We recognize the advantage of using fair values in circumstances where these are based on observable prices in liquid secondary markets, but caution against expanding fair values to financial reporting more generally. We conclude that rather than converging U.S. GAAP with IFRS, competition between the FASB and the IASB would allow GAAP to better respond to market forces.

Manager's Discretionary Power and Comparability of Financial Reports: An Analysis of the Regulatory Transition Process in Brazilian Accounting

“…Kothari et al (2010) claim that, in an extreme view, under a regulatory system based on principles, regulators define a range of principles and allow all interested parties to apply these principles in the specific economic contexts found. Conversely, in a system based on rules, regulators provide the same parties with detailed guides on how they should recognize, measure, and highlight the different economic contexts, minimizing the requirement to exert judgment by managers and other related parties.…”

“…According to Kothari et al (2010), the discretionary level of managers in the preparation of financial reports is related to the type of accounting standard to which they are subject. According to the authors, the debate between regulators of costs and benefits about allowing a greater amount of choices to determine accounting numbers is the foundation of discussion between standards based on rules or principles.…”

“…This is a critical issue both in the domain of the adoption of international standards and outside it. This paper, in general, may help pointing out the impact of a standard based on rules or principles concerning comparability that, according to Schipper (2003) and Kothari, Ramanna and Skinner (2010), is the very driving force through which accounting standards are created. In turn, regarding the convergence process there is a need to evaluate to what extent a trade-off from external to internal comparability takes place, i.e.…”

A divulgação de provisões e passivos contingentes ambientais pelas empresas do setor de energia elétrica em comparação ao desenvolvimento da normatização da evidenciação contábil

“…Por outro lado, os normativos contábeis também tratam das obrigações ambientais (ALCIATORE; DEE; EASTON, 2004;MCNICHOLS, 1994;NEGASH, 2012;ZUBER;BERRY, 1992) Neste contexto de evidenciação, quando a quantidade e qualidade das informações produzidas não são suficientes para comunicar, a assimetria informacional justifica a normatização da evidenciação nos relatórios financeiros (KOTHARI; RAMANNA; SKINNER, 2010). Dado que a regulação é vista como uma das formas de se remediar a insuficiência informacional (LEFTWICH, 1980), a evidenciação obrigatória, como no caso dos relatórios financeiros, pode apresentar diversos benefícios e ser socialmente desejável WYSOCKI, 2008).…”

“…A transferência de informações no mercado é cercada por ineficiências (AKERLOF, 1970;BEAVER, 1998;KOTHARI;RAMANNA;SKINNER, 2010;SCOTT, 2009) e a regulação da divulgação pode contribuir para a minimizar este problema. Para Kothari, Ramanna e Skinner (2010), as razões para se regular o disclosure se baseiam em suposições de falhas de mercado, como externalidades, assimetria de informação e preocupações sobre a imparcialidade no equilíbrio da informação gerada.…”