Journal article
Concepts-based Accounting Standards
Abacus (Sydney), Vol.58(2), pp.209-232
06/2022
DOI: 10.1111/abac.12240
Abstract
While comparability across firms and consistency over time are generally held to be fundamental goals of financial reporting, I provide an analytic representation of a concept that explains why concepts-based accounting standards cannot assure comparability and why their induced consistency may not always be desirable. While the term 'concepts-based accounting standards' has not caught on in the academic and professional literatures, its use here emphasizes the foundational role that language-based concepts play in constructing accounting standards. I appeal to the academic literature in machine learning, neural networks, and especially cognitive science-all of which may represent concepts by S-curve (sigmoid) signatures. I then show how S-curves can explain an accounting standard's (1) precision, (2) comparability across firms, (3) demands placed on judgement, and (4) consistency across time. Accordingly, an S-curve formulation may guide both analytical modelling of accounting standards and add structure to empirical research designs.
Details
- Title: Subtitle
- Concepts-based Accounting Standards
- Creators
- Mark Penno - University of Iowa
- Resource Type
- Journal article
- Publication Details
- Abacus (Sydney), Vol.58(2), pp.209-232
- DOI
- 10.1111/abac.12240
- ISSN
- 0001-3072
- eISSN
- 1467-6281
- Publisher
- Wiley
- Number of pages
- 24
- Language
- English
- Date published
- 06/2022
- Academic Unit
- Accounting
- Record Identifier
- 9984963203902771
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