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