تنظیم استاندارد حسابداری
Abstract
۱٫ Introduction
۲٫ Financial economics, accounting and standard-setting
۳٫ The performativity thesis and the translation of accounting standards
۴٫ Methods
۵٫ The efficient market hypothesis and the translation of the IASB’s expected credit loss model
۶٫ Discussion
۷٫ Conclusion
Acknowledgements
Appendix.
References
Abstract
This paper adds to the literature on the role of financial economics in accounting standard-setting by analyzing the co-performation of an economic theory e the Efficient Market Hypothesis (EMH) e in the construction of a new approach to accounting for credit losses in financial reporting. Inspired by actornetwork theory and its notions of performativity and translation, the paper draws on interview data and documents to reconstruct the process by which the devalued “incurred loss” impairment model was replaced with a more forward-looking “expected loss” approach under IFRS in response to the 2008 financial crisis. These actions comprised of a series of experiments and negotiations, including an unsuccessful effort to establish an “ideal”-type model and the failure of a joint initiative between the IASB and the FASB. Alongside extensive considerations over how to make the approach operational, the influence of the EMH regarding the relationship between loan pricing and initial expectations of credit losses is elucidated. We show how a standard-setting objective grounded in financial economics is translated through a process of approximation as it forges linkages with other matters of concern. This process sheds light on the transformations involved in finding tolerable solutions when utilizing financial economics in the setting of accounting standards.
Introduction
As the preceding quote exemplifies, accounting standard-setters are often influenced by a desire to accurately reflect the underlying economics of business activity. Drawing on the precepts of financial economics, standard-setters are equipped with potentially powerful tools which aim to propel the standard-setting process towards its “correct” conclusion (Himick & Brivot, 2018). As Hopwood (1992) posits, “Economics … is seen as a means for helping accounting to become what it should be, but what currently it is not” (p. 128). Along these lines, previous research highlights the increasing influence of financial economic thought on accounting standards (Bougen & Young, 2012; Ravenscroft & Williams, 2009; Young, 2014) and conceptual frameworks (Erb & Pelger, 2015; Pelger, 2016; Power, 2010; Young, 2006). Nevertheless, as Power (2010) points out, the application of financial economics in financial accounting remains “partial, impure and pragmatic” (p. 209). One explanation for this is that the theories of financial economics, such as the Efficient Market Hypothesis (EMH) stimulated by Fama (1965), are both abstract and empirically uncertain (Whitley, 1986). In addition to challenges to the notion of market efficiency from within the discipline of economics (e.g., Shiller, 1981), pragmatism in the realm of financial accounting often generates obstacles to the application of the doctrine (Power, 2010). In light of this and the dearth of research on the operationalization of financial economic theory in standard-setting, we propose that the manner in which the EMH co-performs accounting standards is an important empirical question.