Conceptual frameworks of accounting from an information perspective

John Christensen

Accounting and Business Research, 2010, vol. 40, issue 3, 287-299

Abstract: This paper analyses the benefits of accounting regulation and a conceptual framework using an information economics approach that allows consideration of uncertainty, multiple agents, demand for information, and multiple information sources. It also allows private information to enter the analysis. The analysis leads to a set of fundamental properties of accounting information. It is argued that the set of qualitative characteristics typically contained in conceptual frameworks does not adequately aggregate the information demands of users of accounting information. For example, the IASB's conceptual framework contains no guidelines for the trade‐off between relevance and reliability. Furthermore, neutrality might not be part of an optimal regulation. The statistical bias introduced by the stewardship use of accounting information is not necessarily undesirable and will always remain; stewardship is the characteristic of accounting information that provides incentives for management to act in the desired way. Accounting information is inherently late compared to other information sources but influences and constrains the content of more timely sources. The accounting system does not exist in a vacuum. Other information sources are present and the purpose of the accounting system cannot be analysed without considering the existence of other information sources. Finally, financial statements are audited by an independent auditor. This implies that accounting data are hard to manipulate.

Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
http://hdl.handle.net/10.1080/00014788.2010.9663403 (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:taf:acctbr:v:40:y:2010:i:3:p:287-299

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RABR20

DOI: 10.1080/00014788.2010.9663403

Access Statistics for this article

Accounting and Business Research is currently edited by Vivien Beattie

More articles in Accounting and Business Research from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().