FASB's initiatives to improve on the quality of standards: the role of constituents at the commentary stage

Andrew Ayimbila Anabila

International Journal of Economics and Accounting, 2010, vol. 1, issue 1/2, 3-21

Abstract: To improve on the quality of standards, FASB has taken certain initiatives. They include a plan to adopt a principles-based approach to standard setting, issue standards jointly with the IASB, and shorten the commentary period. These require participation from constituents. This study examines comment letters on five proposals, for an insight to the role of constituents in the due process and these initiatives. It points out significant limitations in prior research that claimed low participation among constituents. The manner in which FASB handles comment letters sometimes disaffects constituents. This can stall the quality initiative, and widen the expectations gap. From the comment letters, a majority of constituents accept a principles-based approach but apparently contradict themselves by requiring detailed guidance. The evidence shows that shorter commentary periods could hurt quality. Further, non-USA constituents addressed more questions and disagreed more with FASB's provisions. Implications for FASB's initiatives are explored.

Keywords: constituents; due process; comment letters; participation; quality initiatives; standard setting; Financial Accounting Standards Board; FASB; International Accounting Standards Board; IASB; commentary stage; expectations gap; principles-based; rules-based; standards quality; detailed guidance. (search for similar items in EconPapers)
Date: 2010
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.inderscience.com/link.php?id=33898 (text/html)
Access to full text is restricted to subscribers.

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:ids:ijecac:v:1:y:2010:i:1/2:p:3-21

Access Statistics for this article

More articles in International Journal of Economics and Accounting from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().