Abstract

http://ssrn.com/abstract=1515854
 
 

Footnotes (262)



 


 



The Fox and the Ostrich: Is GAAP a Game of Winks and Nods?


Arthur Acevedo


The John Marshall Law School

November 30, 2009


Abstract:     
The fox is frequently described as sly, cunning and calculating in world literature. It is often associated with behavior that seeks advantage through trickery and pretext. The ostrich on the other hand, has been portrayed as cowardly and irrational. Its character defect is epitomized when it sticks its head in the sand at the first sign of trouble. The Financial Accounting Standards Board (FASB) can be described as the fox; the Securities Exchange Commission (SEC), the ostrich. This article examines the creation of accounting principles by the fox and the failure to govern by the ostrich. History demonstrates that the SEC adopted a policy of relying heavily on FASB in establishing accounting standards commonly known as generally accepted accounting principles (GAAP). However, neither FASB nor any of its predecessor organizations bear a responsibility of a public trust, nor any liability in the event of a breach of that trust. The SEC’s failure to establish accounting principles and constant reliance on private standard setters has contributed to the manipulation and exploitation of GAAP by corporations and their auditors. This article challenges the SEC’s policy of relying on third party standard setters such as FASB and calls upon the SEC to stop relying on private standard setters and start taking an active role in creating accounting standards. Only then, can it be said that the SEC is no longer sticking its head in the sand.

Number of Pages in PDF File: 58

JEL Classification: M44

working papers series


Download This Paper

Date posted: December 1, 2009  

Suggested Citation

Acevedo, Arthur, The Fox and the Ostrich: Is GAAP a Game of Winks and Nods? (November 30, 2009). Available at SSRN: http://ssrn.com/abstract=1515854 or http://dx.doi.org/10.2139/ssrn.1515854

Contact Information

Arthur Acevedo (Contact Author)
The John Marshall Law School ( email )
315 South Plymouth Court
Chicago, IL 60604
United States
Feedback to SSRN


Paper statistics
Abstract Views: 741
Downloads: 111
Download Rank: 145,173
Footnotes:  262

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo6 in 0.281 seconds