Blindsided: How Concern for Second Tier Issues Mislead Standard Setters

Mark Hughes, Andrew Read, Cameron Gordon

    Research output: A Conference proceeding or a Chapter in BookConference contribution

    Abstract

    There is a widespread and longstanding realization that the accounting standard setting process has failed to achieve its stated objective, that is, the production of accounting standards that provide decision-useful information to users of general purpose financial reports. Much of the literature surrounding this problem is concerned with the principles versus rules debate. This is important, however, a more immediate issue is whether or not standard setters are producing accounting rules that meet the objective of producing decision-useful information. Despite the political heat generated by Enron and other corporate collapses, there is some evidence that some standard setters continue to ignore the Conceptual Framework and are unduly swayed by second tier issues when developing and reviewing accounting rules. This paper contrasts the approach adopted by the standard setters in EITF 90-15, and EITF 96-16 with that adopted in FIN 46(R) to highlight some of the consequences of adopting a narrowly focused approach, compared to an approach that explicitly incorporates the decision-usefulness objective of the Conceptual Framework.
    Original languageEnglish
    Title of host publicationThe 2008 AFAANZ/IAAER Conference : Proceedings
    Place of PublicationAustralia
    PublisherAFAANZ
    Pages1-16
    Number of pages16
    Publication statusPublished - 2008
    EventThe Accounting and Finance Association of Australia and New Zealand - Sydney, Australia
    Duration: 6 Jul 20088 Jul 2008

    Conference

    ConferenceThe Accounting and Finance Association of Australia and New Zealand
    CountryAustralia
    CitySydney
    Period6/07/088/07/08

    Fingerprint

    Conceptual framework
    Accounting standard setting
    Enron
    Usefulness
    Reviewing
    Accounting standards

    Cite this

    Hughes, M., Read, A., & Gordon, C. (2008). Blindsided: How Concern for Second Tier Issues Mislead Standard Setters. In The 2008 AFAANZ/IAAER Conference : Proceedings (pp. 1-16). Australia: AFAANZ.
    Hughes, Mark ; Read, Andrew ; Gordon, Cameron. / Blindsided: How Concern for Second Tier Issues Mislead Standard Setters. The 2008 AFAANZ/IAAER Conference : Proceedings. Australia : AFAANZ, 2008. pp. 1-16
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    Hughes, M, Read, A & Gordon, C 2008, Blindsided: How Concern for Second Tier Issues Mislead Standard Setters. in The 2008 AFAANZ/IAAER Conference : Proceedings. AFAANZ, Australia, pp. 1-16, The Accounting and Finance Association of Australia and New Zealand, Sydney, Australia, 6/07/08.

    Blindsided: How Concern for Second Tier Issues Mislead Standard Setters. / Hughes, Mark; Read, Andrew; Gordon, Cameron.

    The 2008 AFAANZ/IAAER Conference : Proceedings. Australia : AFAANZ, 2008. p. 1-16.

    Research output: A Conference proceeding or a Chapter in BookConference contribution

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    Hughes M, Read A, Gordon C. Blindsided: How Concern for Second Tier Issues Mislead Standard Setters. In The 2008 AFAANZ/IAAER Conference : Proceedings. Australia: AFAANZ. 2008. p. 1-16