Work

Did the FASB Codification Reduce the Complexity of Applying U.S. GAAP?

Year: 2023

Type: article

Abstract: ABSTRACT We examine whether the Financial Accounting Standards Board (FASB) Codification made it easier for preparers and auditors to locate relevant accounting guidance. We find that areas of U.S. GAAP with more dispersed and voluminous guidance before the Codification experience a larger post‐Codification reduction in restatements. We find a similar decline in SEC comment letter questions referencing areas of U.S. GAAP with more dispersed and voluminous pre‐Codification guidance. Our results suggest that before the Codification, preparers and auditors had difficulty in locating the appropriate accounting guidance and that the Codification mitigated this difficulty.

Source: Journal of Accounting Research

DOI: 10.1111/1475-679x.12480

Authors: Oliver Binz, Robert Hills, Matthew Kubic

Institutions: INSEAD, INSEAD, INSEAD, Pennsylvania State University, The University of Texas at Austin

Language: English

Topic: Auditing, Earnings Management, Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: bronze

OpenAlex ID: W4361007122

FWCI: 2.333

Cites: 60

Cited by: 8

Related to: 10