Experimental Research on Standard-Setting Issues in Financial Reporting

Abstract

Accounting standard setters value input from academic research as they deliberate potential new
standards and evaluate the effects of existing standards. In this paper, we argue that experimental
research is well-suited to producing insights to standard setters before, during, and after accounting
standards are issued. In so doing, we address common questions that arise when researchers
consider undertaking research on standard-setting issues. To facilitate future research in this
domain, we compile the existing experimental research on standard-setting issues and classify it
in categories that correspond to the Financial Accounting Standards Board’s technical agenda and
codification taxonomy. We then use this classification to identify examples of important questions
that future experimental research could address. Finally, we draw on our own experiences to
provide insights intended to help researchers conduct high-quality experimental research that is
relevant to standard setters and publishable in top academic journals.

Keywords: accounting standard setting, financial reporting, research, experiments