A Framework for Financial Reporting Standards: Issues and a Suggested Model

26 Pages Posted: 2 Aug 2009 Last revised: 10 Jun 2013

See all articles by Robert J. Bloomfield

Robert J. Bloomfield

Cornell University - Samuel Curtis Johnson Graduate School of Management

Theodore E. Christensen

University of Georgia - J.M. Tull School of Accounting; University of Georgia

Karim Jamal

University of Alberta - Department of Accounting, Operations & Information Systems

Stephen R. Moehrle

University of Missouri at Saint Louis - Accounting Area

James A. Ohlson

Hong Kong Polytechnic University - School of Accounting and Finance

Stephen H. Penman

Columbia University - Columbia Business School, Accounting, Business Law & Taxation

Gary Previts

Case Western Reserve University - Department of Accountancy

Thomas L. Stober

University of Notre Dame - Department of Accountancy

Shyam Sunder

Yale University - School of Management; Yale University - Cowles Foundation

Ross L. Watts

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Robert H. Colson

Grant Thornton LLP

Multiple version iconThere are 2 versions of this paper

Date Written: July 30, 2009

Abstract

Standard setters and most academics maintain that accounting standards ought to rest on a set of guiding principles stated explicitly in a “conceptual framework.” The FASB and IASB are currently involved in a project to refine conceptual framework documents developed earlier. At this point, it is not clear what their final product will look like; its defining characteristics as well as the substantive content can only be surmised. This paper addresses the issues that FASB and IASB face, including the question of what a conceptual framework should be all about. First, we suggest characteristics that a conceptual framework ought to exhibit. Most of these suggestions are based on our critique of the existing framework and the FASB-IASB work in progress. Second, we present a model framework that meets our criteria. We emphasize up front that this framework is quite explicit. It goes to the heart of what a framework document should do: it places specific restrictions on what constitutes admissible accounting standards. The purpose of our effort is to stimulate broad discussion of alternative approaches to foundational documents and to offer a specific example of such an alternative approach.

Keywords: FASB, IASB, Conceptual Framework, Accounting Standards, Financial Reporting

JEL Classification: M40, M41, M44

Suggested Citation

Bloomfield, Robert J. and Christensen, Theodore E. and Jamal, Karim and Moehrle, Stephen R. and Ohlson, James A. and Penman, Stephen H. and Previts, Gary J. and Stober, Thomas L. and Sunder, Shyam and Watts, Ross L. and Colson, Robert H., A Framework for Financial Reporting Standards: Issues and a Suggested Model (July 30, 2009). Accounting Horizons, Vol. 24, No. 3, 2010, University of Alberta School of Business Research Paper No. 2013-678, Available at SSRN: https://ssrn.com/abstract=1441338 or http://dx.doi.org/10.2139/ssrn.1441338

Robert J. Bloomfield

Cornell University - Samuel Curtis Johnson Graduate School of Management ( email )

450 Sage Hall
Ithaca, NY 14853
United States
607-255-9407 (Phone)
607-254-4590 (Fax)

Theodore E. Christensen

University of Georgia - J.M. Tull School of Accounting ( email )

Athens, GA 30602
United States

University of Georgia ( email )

Athens, GA
United States

Karim Jamal

University of Alberta - Department of Accounting, Operations & Information Systems ( email )

Edmonton, Alberta T6G 2R6
Canada
780-492-5829 (Phone)
780-492-3325 (Fax)

Stephen R. Moehrle

University of Missouri at Saint Louis - Accounting Area ( email )

8001 Natural Bridge Road
St. Louis, MO 63121
United States
314-516-6142 (Phone)
314-516-6420 (Fax)

James A. Ohlson

Hong Kong Polytechnic University - School of Accounting and Finance ( email )

M715, Li Ka Shing Tower
Hung Hom, Kowloon
China

Stephen H. Penman (Contact Author)

Columbia University - Columbia Business School, Accounting, Business Law & Taxation ( email )

665 West 130 Street
Kravis Hall
New York, NY 10027
United States
(212) 854-9151 (Phone)

Gary J. Previts

Case Western Reserve University - Department of Accountancy ( email )

Cleveland, OH 44106-7235
United States
216-368-2074 (Phone)
216-368-4776 (Fax)

Thomas L. Stober

University of Notre Dame - Department of Accountancy ( email )

Notre Dame, IN 46556-0399
United States
219-631-7614 (Phone)

Shyam Sunder

Yale University - School of Management ( email )

165 Whitney Avenue
P.O. Box 208200
New Haven, CT 06520-8200
United States
203-432-6160 (Phone)

HOME PAGE: http://www.som.yale.edu/faculty/sunder/

Yale University - Cowles Foundation ( email )

Box 208281
New Haven, CT 06520-8281
United States

Ross L. Watts

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

E52-325
Cambridge, MA 02142
United States

Robert H. Colson

Grant Thornton LLP ( email )

Chicago, IL
United States

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