Record Details

Principles-Based Accounting Standards and Corporate Governance Considerations

The Journal of Accounting and Management

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Field Value
 
Title Principles-Based Accounting Standards and Corporate Governance Considerations
 
Creator Bjornsen, Matt; Oklahoma State University
Fornaro, James
 
Subject disclosure; financial reporting; rules-based; corporate; environment
 
Description Objectives: This paper examines the implications of principles-based versus rules-based accounting standards, specifically as related to corporate governance. Prior Work: The debate over the benefits and consequences of principles-based versus rules-based accounting standards has ensued for decades. However, comparing the approaches in a real-life, practical setting has proved challenging. Principles-based standards require increased managerial judgement, and accordingly, effective oversight is required by those responsible for corporate governance. Approach: This paper examines corporate governance surrounding the implementation of guidance under a “principles-based” piece of guidance that was subsequently supplemented with additional “rules-based” guidance in order to better enforce the intent of the original guidance. Results: Many firms needed the subsequent “rules-based” guidance in order to comply with the original intent of the “principles-based” guidance. Corporate governance does not appear to determine compliance. Implications: These results should be of interest to practitioners and regulators, and are important given the ongoing movement toward principles-based standards. The SEC [2016] is exploring whether existing prescriptive guidance in Regulation S-K should be replaced with a principles-based framework for financial disclosures. Value: This paper capitalizes on a unique setting provide a fresh analysis in the debate between principles-based and rules-based accounting standards.
 
Publisher The Journal of Accounting and Management
 
Contributor —
 
Date 2019-09-09
 
Type Peer-reviewed Article
 
Format application/pdf
 
Identifier http://journals.univ-danubius.ro/index.php/jam/article/view/5706
 
Source The Journal of Accounting and Management; Vol 9, No 1 (2019): JAM
 
Language en
 
Rights The author fully assumes the content originality and the holograph signature makes him responsible in case of trial.