Accounting Standards and Global Convergence Revisited: Social Norms and Economic Concepts

Shizuki Saito
Additional contact information
Shizuki Saito: The Faculty of Economics, Meiji Gakuin University, Japan

The Japanese Accounting Review, 2011, vol. 1, 105-117

Abstract: The leitmotifs underlying accounting standards setting have undergone changes over time, from best practices to a normative approach and then to global convergence. In the process, accounting standards have gradually lost their character as a set of informal social norms based on market practices. This trend, combined with the pursuit of a formal framework not amenable to adjustment through feedback from market tests, has unavoidably brought about a top-down approach. Under this approach, the uniformity of standards from the viewpoint of regulators has been given priority over the usefulness of income information for users of financial statements. Consequently income information, which plays an essential role in the valuation of companies in capital markets, has been aff ected by a mechanical application of the asset-liability approach and fair value measurement with scant attention to a marked diff erence in business transactions. Because investors today almost disregard national borders, the homogenization of accounting information is certainly an important goal. To achieve this goal, however, it is necessary to facilitate the spontaneous homogenization of norms based on an evolutionary market process which enables standards setters to incorporate vox populi into accounting standards themselves rather than decide on the direction and degree of convergence on an a priori basis.

Keywords: Accounting Standards; Convergence; Social Norms; Income Concepts; Asset-Liability Approach; Fair Value Measurement (search for similar items in EconPapers)
JEL-codes: M40 M48 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://www.rieb.kobe-u.ac.jp/tjar/article/vol1/pdf/6.Saito.pdf (application/pdf)

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:kob:tjrevi:dec2011:v:1:p:105-117

Access Statistics for this article

The Japanese Accounting Review is currently edited by Hidetoshi Yamaji

More articles in The Japanese Accounting Review from Research Institute for Economics & Business Administration, Kobe University Contact information at EDIRC.
Bibliographic data for series maintained by TJAR Editorial Office ().