Logo Logo

On the Possibility of Socially-Accepted Accounting Standards

Abstract

This article examines the nature of accounting standards under super majority voting by parties informed about the value of their asset. A standard is stable if it is preferred by enough voters over any other standard. Absent any restriction on the space of possible standards, we show that there is no stable standard regardless of the super majority. Restricting the space of standards that classify news monotonically, there exists a super majority such that the unique stable standard is full disclosure. For a large class of common distributions, the required super majority is about 63%.

Type

Working Paper

Author(s)

Robert Magee, Jeremy Bertomeu, Georg Schneider

Date Published

2016

Citations

Magee, Robert, Jeremy Bertomeu, and Georg Schneider. 2016. On the Possibility of Socially-Accepted Accounting Standards.

KELLOGG INSIGHT

Explore leading research and ideas

Find articles, podcast episodes, and videos that spark ideas in lifelong learners, and inspire those looking to advance in their careers.
learn more

COURSE CATALOG

Review Courses & Schedules

Access information about specific courses and their schedules by viewing the interactive course scheduler tool.
LEARN MORE

DEGREE PROGRAMS

Discover the path to your goals

Whether you choose our Full-Time, Part-Time or Executive MBA program, you’ll enjoy the same unparalleled education, exceptional faculty and distinctive culture.
learn more