Decision-Usefulness and Stewardship As Conceptual Framework Objectives: Continuing Challenges

41 Pages Posted: 16 Feb 2017

See all articles by Carolyn J. Cordery

Carolyn J. Cordery

Aston University; Victoria University of Wellington - School of Accounting and Commercial Law

Rowena M.S. Sinclair

Auckland University of Technology

Date Written: February 16, 2016

Abstract

While, since 2006, the International Accounting Standards Board (IASB) has held decision-usefulness to be the primary objective of financial reporting, constituents have consistently called for stewardship/accountability to be a second objective. Such strong lobbying has led the IASB to amend the objectives of financial reporting by increasing the prominence of stewardship, favoured by many European constituents. However, these two objectives have different theoretical bases and the potential users have different needs. Two different objectives should result, at times, in different presentation and measurement. The purpose of this paper is to project the implications if the IASB prioritizes dual objectives (decision-usefulness and stewardship) for general purpose financial reporting of both monetary and non-monetary information. We analyse specific potential conflicts in extant financial reporting standards. A potential solution to the IASB’s dilemma is to balance constituents’ demands by explicitly acknowledging which users’ needs are being pursued and why.

Keywords: Accountability, Conceptual Framework, Decision-usefulness, Hybrid model, Stewardship, Users’ needs

Suggested Citation

Cordery, Carolyn J. and Sinclair, Rowena M.S., Decision-Usefulness and Stewardship As Conceptual Framework Objectives: Continuing Challenges (February 16, 2016). Available at SSRN: https://ssrn.com/abstract=2918784 or http://dx.doi.org/10.2139/ssrn.2918784

Carolyn J. Cordery (Contact Author)

Aston University ( email )

Aston Business School
Aston Triangle
Birmingham, B4 7ET
United Kingdom

Victoria University of Wellington - School of Accounting and Commercial Law ( email )

Faculty of Commerce and Administration
PO Box 600
Wellington
New Zealand

Rowena M.S. Sinclair

Auckland University of Technology ( email )

AUT City Campus
Private Bag 92006
Auckland, 1142
New Zealand

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