Practices of standard-setting – An analysis of the IASB's and FASB's process of identifying the objective of financial reporting

Pelger, Christoph

doi:10.1016/j.aos.2015.10.001

Cited by 90 publications

(141 citation statements)

References 96 publications

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“…Hence, the issue which the paper investigates is whether the stance of the two boards on stewardship is tenable from an historical perspective. 2 In so doing, it clarifies 3 exactly what type of information has been overlooked by the boards in their downgrading of stewardship, which was a cause of confusion in the discussions leading to CS#8 [Pelger, 2016]. The findings challenge Miller and Napier's [1993] assertion that there is no essence to accounting.…”

Section: Introductioncontrasting

confidence: 45%

“…Proponents of stewardship as a distinct objective of financial reporting failed to convince FASB members in particular that a stewardship perspective would make any difference in practice [Pelger, 2016]. Part of the difficulty revolved around the lack of a standard definition of the term and the fact that stewardship information can indeed be useful to investors in assessing future cash flows [ibid, p. 61].…”

Section: Informationmentioning

confidence: 99%

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Does Stewardship Still Have A Role?

Miller

Oldroyd

2018

Accounting Historians Journal

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The full-text may be used and/or reproduced, and given to third parties in any format or medium, without prior permission or charge, for personal research or study, educational, or not-for-prot purposes provided that:• a full bibliographic reference is made to the original source • a link is made to the metadata record in DRO • the full-text is not changed in any way The full-text must not be sold in any format or medium without the formal permission of the copyright holders.Please consult the full DRO policy for further details. Abstract: The paper analyzes the decision of FASB and IASB not to treat the motivational and control aspects of stewardship as a separate and distinct reporting objective to that of facilitating investment decisions. It does so firstly by considering the demand for information to control agents; and secondly by assessing the capacity of decision-useful information to replicate stewardship effects. The paper finds an essence to accounting based on the legal protection of property rights, encompassing stewardship, which has remained constant since earliest times. The decision taken by the boards on stewardship also appears disconnected from changes in the capital markets as well as the writings on reporting objectives that preceded it.

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Section: Introductioncontrasting

confidence: 45%

Section: Informationmentioning

confidence: 99%

Does Stewardship Still Have A Role?

Miller

Oldroyd

2018

Accounting Historians Journal

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“…Indeed, the IASB's modus operandi appears to rule out of consideration the practice of private contracting, suggesting that much of the analysis in the literature is simply not relevant. The IASB's Framework explicitly identifies the purpose of financial reporting in terms of decision-relevance for (primarily) investors, and not in terms of providing data for contracting purposes (Pelger, 2014a). This is stated as follows in the Preface to IFRS (para.…”

Section: Is a Contracting Perspective Relevant To Ifrs?mentioning

confidence: 99%

An Analysis of Concepts and Evidence on the Question of Whether IFRS Should be Conservative

Barker

McGeachin

2015

Abacus

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Do international accounting standards require conservative accounting? The IASB's conceptual framework suggests that they should not, while the research literature is largely silent on the matter, typically presuming conservatism to be an outcome of private contracting rather than standardized, public, general purpose financial reporting. In this paper, we analyze the actual requirements of IFRS. We find multiple examples of recognition requirements that lead to unconditional conservatism, measurement requirements that lead to conditional conservatism, and also presentation/ disclosure requirements that further support a conservative reporting environment. These findings complement, support and deepen existing evidence in the empirical literature that accounting is in practice conservative. We show, however, that the requirements for conservatism in IFRS conflict with, first, the IASB's stated position in its conceptual framework that accounting should not be conservative and, second, the private contracting explanation for conservatism that is generally accepted in the literature. What is missing, and lies behind both conflicts, is an acknowledgement and understanding of the role of an agency/contracting perspective in enhancing the decision-usefulness of general purpose accounting standards, given the information/incentive asymmetry and uncertainty that characterizes the real-world context in which those standards operate. From a policy perspective, such an understanding would reconcile the IASB's conceptual framework with the actual requirements of IFRS. From a research literature perspective, such an understanding would re-position accounting standards as central to the practice of accounting conservatism, which would in turn require revision to the generally accepted theory of a private contracting explanation for the empirical evidence of conservative accounting practice.

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“…We are pleased to see that others have begun working with these materials as well, and have further enriched their sources by interviewing Board members or other participants (e.g. Pelger, 2016;Ram & Newberry, 2013), but the general field of studying the IASB's deliberations more directly as opposed to through the prism of comment letters is still wide open.…”

Section: Comment Letter Analysismentioning

confidence: 99%

The Challenge of Setting Standards for a Worldwide Constituency: Research Implications from the IASB’s Early History

Camfferman

Zeff

2017

European Accounting Review

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Based on Camfferman and Zeff [(2015). Aiming for global accounting standards : The International Accounting Standards Board, 2001. Oxford: Oxford University Press] we reflect on possibilities for academic research on the International Accounting Standards Board (IASB) and its International Financial Reporting Standards (IFRSs). We argue that a research agenda may be formed around the notion that the IASB differs from national standard setters because its constituent base includes jurisdictions as well as the more traditional preparer, user and auditor constituency groups. We show that taking a jurisdictional angle draws attention to the variety among the IASB's jurisdictional constituents, identifying numerous research possibilities related to their decisions to adopt, or not to adopt, IFRSs, and to the mechanisms they have developed to form their own IFRS policies and to interact with the IASB. We illustrate how the IASB's structure, governance, processes and standards are influenced by the challenge of reconciling the needs and values of jurisdictional constituents with the objective of setting global accounting standards. We call for research on the ramifications of the diversity of jurisdictional constituents, as well as changing perceptions of standard setting within jurisdictions, for all aspects of the functioning of the IASB. Such research should make greater use of the variety of sources available to researchers today.

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Practices of standard-setting – An analysis of the IASB's and FASB's process of identifying the objective of financial reporting

Cited by 90 publications

References 96 publications

Does Stewardship Still Have A Role?

Does Stewardship Still Have A Role?

An Analysis of Concepts and Evidence on the Question of Whether IFRS Should be Conservative

The Challenge of Setting Standards for a Worldwide Constituency: Research Implications from the IASB’s Early History

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