Better Financial Reporting
Better Financial Reporting
Shyam Sunder, Yale University
Sixth University of Alberta Accounting
Research Conference
Banff, August 15-16, 2015
An Overview
•
What is good (or better) financial reporting?
Three approaches
•
How do we improve financial reporting?
•
Where are we?
•
Speculations about meritorious
process/institutions
What is good (or better) financial
reporting? Three approaches
•
Attributes:
–
Truth
–
Judgmental attributes
–
Statistical and disclosure attributes
•
Goals/Objective
–
Of society
–
Of individuals or groups
–
Of financial reporting itself
•
Social practice/ritual
–
Positive theory; Panglossian perspective
How do we improve financial
reporting?
•
Rules
–
Statutes, regulations
•
Social norms
–
Evolution, emergence, direction? Nudging?
•
Choose institutions or process,
–
not outcomes
Where are we?
•
Can improve?
•
Already over reporting
•
Just right
•
How do we find out where we are?
Speculations about meritorious
process/institutions
•
Community consensus
•
Soft power of reason, explanation, dialog, education,
disclosure
•
Reduced use of enforcement power
•
Value of diversity in practice: signaling and feedstock for
innovation
•
Evolution/emergence of accounting as a natural language
•
Field testing
•
Back stopped by courts, case law, true-and-fair judgments
•
What is the risk?
Understanding good financial reporting approaches, truth in reporting, improving processes, and speculations on meritorious institutions in the field of accounting.
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Presentation Transcript
Better Financial Reporting Shyam Sunder, Yale University Sixth University of Alberta Accounting Research Conference Banff, August 15-16, 2015
An Overview What is good (or better) financial reporting? Three approaches How do we improve financial reporting? Where are we? Speculations about meritorious process/institutions
What is good (or better) financial reporting? Three approaches Attributes: Truth Judgmental attributes Statistical and disclosure attributes Goals/Objective Of society Of individuals or groups Of financial reporting itself Social practice/ritual Positive theory; Panglossian perspective
How do we improve financial reporting? Rules Statutes, regulations Social norms Evolution, emergence, direction? Nudging? Choose institutions or process, not outcomes
Where are we? Can improve? Already over reporting Just right How do we find out where we are?
Speculations about meritorious process/institutions Community consensus Soft power of reason, explanation, dialog, education, disclosure Reduced use of enforcement power Value of diversity in practice: signaling and feedstock for innovation Evolution/emergence of accounting as a natural language Field testing Back stopped by courts, case law, true-and-fair judgments What is the risk?
