The Objectives of Financial Reporting: A Historical Survey and Analysis
Accounting and Business Research, Forthcoming
93 Pages Posted: 4 Jan 2013
Date Written: January 1, 2013
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: Suggested Citation