Citations (3)



Uniform Financial Reporting Standards: Reconsidering the Top-Down Push

Shyam Sunder

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

March 2007

Yale ICF Working Paper No. 07-11

Financial reporting environment of the world is dominated today by a top down push for uniform financial reporting standards. The advantages of uniformity and monopoly standards have been well-publicized compared to their disadvantages. No language, accounting included, can flourish under the protective umbrella of punitive authority of state. Like languages and dictionaries, accounting and other social phenomena develop best through bottom up processes. We do not have enough the design knowledge to set standards whose consequences cannot be undone by adjusting transactions. Elimination of alternative accounting treatments prevents credible revelation of information through financial statements. Codification of accounting diminishes the judgment-honing function of class room discourse to promote rote memorization that drives away talent from the profession. Introduction of regulatory competition among alternative sets of financial standards may help improve accounting practice.

Number of Pages in PDF File: 4

JEL Classification: M41, M44

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Date posted: March 13, 2007  

Suggested Citation

Sunder, Shyam, Uniform Financial Reporting Standards: Reconsidering the Top-Down Push (March 2007). Yale ICF Working Paper No. 07-11. Available at SSRN: https://ssrn.com/abstract=969731 or http://dx.doi.org/10.2139/ssrn.969731

Contact Information

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)
HOME PAGE: http://www.som.yale.edu/faculty/sunder/

Yale University - Cowles Foundation
Box 208281
New Haven, CT 06520-8281
United States

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