Digital standard setting: the inevitable paradigm

Miklos A. Vasarhelyi and J.P. Krahel

International Journal of Economics and Accounting, 2011, vol. 2, issue 3, 242-254

Abstract: Many steps in the creation and dissemination of new accounting standards lag behind the rest of the modern world. Issues are often addressed too late to rectify major problems, in language at once too vague to deal effectively with the nuances of real world business decisions, and too lengthy to be of use to managers who need to easily and quickly absorb a new manner of thinking. Standards must become clearer, more concise and more timely. We advocate an expansion of the FASB's promulgation framework. Specifically, we advocate an alternate, pseudocoded presentation. By translating written standards into a form that can easily be adapted by software developers into proprietary languages, the FASB will reduce ambiguity, increase uniformity of application, and reduce lag between the introduction of a standard and its universal implementation. We present and discuss two examples of the application of pseudocode to pre- and post-codification accounting standards.

Keywords: GAAP; formalisation; pseudocode; accounting standards; ambiguity; convergence; proprietary languages; software development. (search for similar items in EconPapers)
Date: 2011
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