Research Details

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.