The Problem of Improving Financial Reporting

Izmir Review of Social Sciences Vol. 1, No. 1, 1-6, June 2013

6 Pages Posted: 2 Jul 2013

See all articles by Shyam Sunder

Shyam Sunder

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

Date Written: May 3, 2013


Improving financial reporting calls for achieving a fine balance between codification of accounting rules, and development of norms whose enforcement depends on judgment about shared values and expectations in society. Over the past century, financial reporting has pursued codification in excess with unfortunate consequences. Development of mathematical finance, and concomitant financial engineering makes written rules of accounting almost instantaneously obsolete through creation of new transactions and instruments. A more open system in which multiple standard setting bodies compete with one another to attract following among the preparer and user communities may help keep financial reporting useful.

Keywords: improving financial reporting, common law, financial engineering, regulatory competition

JEL Classification: M41, M44

Suggested Citation

Sunder, Shyam, The Problem of Improving Financial Reporting (May 3, 2013). Izmir Review of Social Sciences Vol. 1, No. 1, 1-6, June 2013. Available at SSRN: or

Shyam Sunder (Contact Author)

Yale University - School of Management ( email )

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


Yale University - Cowles Foundation

Box 208281
New Haven, CT 06520-8281
United States

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