Unreliable Accounts: Governing behind a Veil

Williams Paul F. ()
Additional contact information
Williams Paul F.: Accounting, North Carolina State University at Raleigh, Poole College of Management, Box 8113, Raleigh, NC, 27695, USA

Accounting, Economics, and Law: A Convivium, 2022, vol. 12, issue 2, 211-231

Abstract: This paper serves as a commentary to Professor Ramanna’s paper, “Unreliable Accounts: How Regulators Fabricate Conceptual Narratives to Diffuse Criticism.” The case analyzed by Professor Ramanna is the case of CON 8 in which the FASB changed the qualitative characteristics originally identified in CON2 to eliminate the concept of reliability from those qualities accounting data must possess before such data is decision useful. This commentary intends to add some historical depth to the particular case analyzed by Professor Ramanna to demonstrate that conceptual veiling has been a continuous process since the FASB’s original concepts statements that created a conceptual framework made up of two conflicting narratives, i.e. a mixing of the language of two metaphors for accounting. These two metaphors are “accountability” and “information.” The fateful error that has plagued the concepts statements with incoherence since the FASB began was the repurposing of accounting to that of “decision usefulness.” Decision usefulness as defined by FASB had to contain the property of prediction, explicitly predicting the timing, amount and uncertainty of cash flows. However, information is always “about something;” it is not a free-floating abstraction. Since knowledge about the future in economic affairs has eluded the ability of economists and likely always will, FASB is allegedly providing information about the future for which is has not any noteworthy expertise. CON 8 is just another stage of the growing incoherence of the concepts project. The norms of double entry accounting that developed over centuries and shaped accounting’s fundamental concepts served the purposes of accountability for which information to be information must be reliable. The entire edifice of science would collapse if scientific information were not reliable. Without reliability, the boundary between information and misinformation is blurred to the point of invisibility. Professor Ramanna’s analysis provides great insight into the absurdity standard setters now endorse that information does not have to reliable!

Keywords: FASB; conceptual veiling; accountability; decision usefulness (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1515/ael-2021-0107 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:aelcon:v:12:y:2022:i:2:p:211-231:n:7

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/ael/html

DOI: 10.1515/ael-2021-0107

Access Statistics for this article

Accounting, Economics, and Law: A Convivium is currently edited by Reuven S. Avi-Yonah, Yuri Biondi and Shyam Sunder

More articles in Accounting, Economics, and Law: A Convivium from De Gruyter
Bibliographic data for series maintained by Peter Golla ().