The Objectives of Financial Reporting: A Historical Survey and Analysis

Accounting and Business Research, Forthcoming

93 Pages Posted: 4 Jan 2013

See all articles by Stephen A. Zeff

Stephen A. Zeff

Rice University - Jesse H. Jones Graduate School of Business

Date Written: January 1, 2013

Abstract

The aim of this article is to survey and analyze the succession of writings on the objectives of financial reporting during the past 90 years with a view towards contributing to an understanding of the origins and limitations of conceptual frameworks. The article begins with a review of the extensive literature, including the series of recommended and approved conceptual frameworks, in the United States and then proceeds to the literatures in Great Britain, Canada, and Australia, followed by a discussion of the framework issued by the IASC in 1989 and chapters 1 and 3 of the framework issued by the IASB/FASB in 2010. Summary remarks about Continental Europe conclude the survey. Attention is drawn to the criticisms of the objectives approach as well as to its possible perverse consequences for the remainder of the framework. In the course of the survey, there is an attempt to trace the evolution of stewardship and conservatism, or prudence, in the series of frameworks.

Keywords: objectives, financial statements, financial reporting, standard setting, conceptual frameworks, stewardship, conservatism, prudence

JEL Classification: M41

Suggested Citation

Zeff, Stephen A., The Objectives of Financial Reporting: A Historical Survey and Analysis (January 1, 2013). Accounting and Business Research, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2196476

Stephen A. Zeff (Contact Author)

Rice University - Jesse H. Jones Graduate School of Business ( email )

6100 South Main Street
P.O. Box 1892
Houston, TX 77005
United States
713-348-6066 (Phone)
713-348-6296 (Fax)

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