What You Measure is What You Get: The Effects of Accounting Standards Effects Studies

Gross, Christian und Königsgruber, Roland, What You Measure is What You Get: The Effects of Accounting Standards Effects Studies, Accounting in Europe, Vol. 9, Issue 2, 171-190, 2012.

Posted: 23 Jan 2014

Date Written: January 22, 2014

Abstract

The UK’s Accounting Standards Board and the European Financial Reporting Advisory Group have published a discussion paper entitled ‘Considering the Effects of Accounting Standards’. While the effort to think through potential consequences of proposed regulatory acts in advance is welcome, we argue that these effects are not only dependent on the investigated standards themselves, but also on the institutional environment where they unfold, which is heterogeneous in different jurisdictions. More importantly, insights from behavioural research on decision heuristics suggest that the public debate surrounding accounting reforms will evolve around the topics emphasised in effects studies, while other potential areas of interest are likely to be ignored. As costs of proposed standards are even harder to measure than costs of existing ones, a problem of regulatory overproduction could be exacerbated. We suggest a more modest approach of focusing on identifying ‘failure conditions’ under which new standards are likely to lead to detrimental consequences.

Keywords: standard setting, accounting regulation

JEL Classification: M40, M48

Suggested Citation

Koenigsgruber, Roland and Gross, Christian, What You Measure is What You Get: The Effects of Accounting Standards Effects Studies (January 22, 2014). Gross, Christian und Königsgruber, Roland, What You Measure is What You Get: The Effects of Accounting Standards Effects Studies, Accounting in Europe, Vol. 9, Issue 2, 171-190, 2012.. Available at SSRN: https://ssrn.com/abstract=2383163

Roland Koenigsgruber (Contact Author)

SKEMA Business School ( email )

Lille
France

Christian Gross

University of Graz ( email )

Universitaetsstrasse 15 / FE
A-8010 Graz, 8010
Austria

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