Towards an understanding of the role of standard setters in standard setting

Abigail McIntosh Allen () and Karthik Ramanna ()
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Abigail McIntosh Allen: Harvard Business School
Karthik Ramanna: Harvard Business School, Accounting and Management Unit

No 10-105, Harvard Business School Working Papers from Harvard Business School

Abstract: We investigate the effect of standard setters in standard setting: We examine how certain professional and political characteristics of FASB members and SEC commissioners predict the accounting "reliability" and "relevance" of proposed standards. Notably, we find FASB members with backgrounds in financial services are more likely to propose standards that decrease "reliability" and increase "relevance," partly due to their tendency to propose fair-value methods. We find opposite results for FASB members affiliated with the Democratic Party, although only when excluding financial-services background as an independent variable. Jackknife procedures show that results are robust to omitting any individual standard setter.

Keywords: accounting; FASB; politics; relevance; reliability; standard setting (search for similar items in EconPapers)
JEL-codes: D72 D78 G18 K22 L51 M41 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2010-05, Revised 2012-05
New Economics Papers: this item is included in nep-acc and nep-pol
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:hbs:wpaper:10-105

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