财务会计理论(司可脱)PPT文件13_scott_im_ch13.pptVIP

CHAPTER 13 Standard Setting: Political Issues Two Theories of Regulator Behaviour Public Interest Theory A “first best” theory Goal is to maximize social welfare Interest Group Theory Implies conflict between constituencies A “second best” theory, since regulator takes own interests into account, while balancing demands of investors and managers Investors’ Demands On Standard Setting Investors Represented by OSC, SEC, IOSCO Want Full Disclosure, Fair Values, Transparency Want to Predict Future Firm Performance Managements Demands on Standard Setting Wants Flexibility to Control (Manage) Reported Net income Wants Net Income to be Highly Informative About Effort Role of Standard-Setter Role is Difficult No “true” net income The fundamental problem of financial accounting theory Implies conflict between investors and managers Mediation and Compromise Standards must be acceptable to both investors and management Text: Section 13.6.1 re SFAS 115 Structure of Accounting Standard-Setting Bodies Most Consistent with Interest Group Theory Broad representation Exposure drafts Super-majority voting The Interest Group Theory in Action See Chapter 13, Question 5 To “kill” the FASB Rules-Based v. Principles-Based Accounting Standards Rules-Based Standards Lay down detailed rules Possible? Principles-Based Standards Lay down general rules Auditor professional judgement to prevent opportunistic manager behaviour Possible? Criteria For a Successful Standard Decision Useful Reduce Information Asymmetry No Serious Economic Consequences Consensus Other Comprehensive Income Presented with Income Statement Net income from operations xxx Extraordinary items xxx Net income xxx Other comprehensive income xxx Comprehensive income xxx Alternative Presentation As part of statement of changes in shareholders’ equity Less transparent, especially if securities markets not fully efficient International Accounting Standards The IASB IASB-AcSB Cooperation AcSB proposal to move to IAS