A Change in Accounting, A Change in Law

24 Pages Posted: 22 Sep 2016

See all articles by Israel Klein

Israel Klein

Ariel University - Department of Economics and Business Administration

Date Written: September 19, 2016

Abstract

While the influence of accounting on the financial environment of corporations and institutions cannot be denied, scholars have yet to examine the significant effect accounting standards have on the legal system. This article aims to fill this gap in the literature by discussing the legal use of financial accounting and the impact changes in accounting standards has on fiscal and regulatory regimes that utilize accounting parameters.

Specifically, this article argues that the role financial accounting plays in the legal system endows it with a quasi-legislative capacity, which is exercised when the frequent and regular changes to prevailing accounting practices exogenously affect legal regimes that utilize accounting parameters. This article calls attention to accounting’s power to affect legal regimes while suggesting measures to cope with the legal consequences caused by changing accounting standards.

Keywords: GAAP, Financial Accounting, IFRS, Law and Accounting, Corporate Law

Suggested Citation

Klein, Israel, A Change in Accounting, A Change in Law (September 19, 2016). Delaware Journal of Corporate Law (DJCL), Vol. 42, No. 1, 2017 Forthcoming, Available at SSRN: https://ssrn.com/abstract=2840968

Israel Klein (Contact Author)

Ariel University - Department of Economics and Business Administration ( email )

Israel

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