| Author: | Brown, G. Collins, R. Thornton, D. |
| Title: | Professional judgment and accounting standards |
| Journal: | Accounting, Organizations and Society
1993 : MAY, VOL. 18:4, p. 275-289 |
| Index terms: | ACCOUNTING STANDARDS LIABILITY |
| Language: | eng |
| Abstract: | This essay explores relationships between accounting standards and people's inferences and judgments. Acknowledging that Demski's impossibility theorem implies that the standards will be "social-preference-incomplete", the paper shows that they are also "decision-procedure incomplete" on three levels. These levels correspond to three kinds of professional judgment: semantic , pragmatic and institutional. The investigation facilitates understanding of (1) how accountants exercise judgment and deduction in applying incomplete standards; (2) how financial statement readers use the incomplete standards to draw deductive inferences from financial reports which are based on accountants' judgments. |
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