Affiliation:
1. Blavatnik School of Government, University of Oxford , Oxford , UK
Abstract
Abstract
In 2010, the U.S. accounting rulemaker (FASB) updated its longstanding constitution to eliminate “reliability” as a fundamental accounting property. FASB argued that “reliability” was misunderstood in practice and that this amendment clarified its original intent. Drawing on primary archival resources and field interviews with regulators, I provide evidence that the change also sought to legitimize the rise of fair-value accounting. By eliminating the need for accounting to be “reliable,” the change attempted to neutralize concerns about the subjectivity in fair-value estimates. Such subjectivity can facilitate accounting manipulation, and some fair-value rules can be attributed to lobbying by managers who stand to benefit. The change illustrates “conceptual veiling,” wherein regulators, seeking to diffuse criticism, including suspicions of capture, manufacture costly conceptual narratives for justifying their actions.
Subject
Law,Economics, Econometrics and Finance (miscellaneous),Accounting
Reference96 articles.
1. (In addition to the references below, this article relies on interview evidence described chiefly in Section 5; primary archival sources in the list below are marked *)
2. Admati, A. R., & Hellwig, M. F. (2014). The bankers’ new clothes: What’s wrong with banking and what to do about it. Princeton, NJ: Princeton University Press.
3. * Allen, M. (2006). Melissa Allen to international accounting standards board. Letter of Comment No. 109, No. 1260–001. London, U.K.
4. Allen, A. M., & Ramanna, K. (2013). Towards an understanding of the role of standard setters in standard setting. Journal of Accounting and Economics, 55, 66–90. https://doi.org/10.1016/j.jacceco.2012.05.003.
5. Biondi, Y. (2016). Empowering market-based finance: A note on bank bailouts in the aftermath of the north atlantic financial crisis of 2007. Accounting, Economics, and Law, 6, 79–84. https://doi.org/10.1515/ael-2016-0004.
Cited by
6 articles.
订阅此论文施引文献
订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献