Macro and Micro Earnings Manipulation: The Role of Accounting Standard Setting Process

Abstract

Preparers of financial statements are in aposition to influence the view of economic reality presented inthose statements to interested parties. The term 'macromanipulation'is used to describe the lobbying of preparersagainst regulators (accounting standards setters) to persuadethem to produce regulation that is more favorable to theinterests of preparers. The aime of this paper is to introduce asuggested tool that could be used to ascertain why somefinancial accounting standards turn out to the benefit of one ofthe stakeholders involved in the process of accountingstandards setting. This paper utilizes the construct of power toreveal the influences from parties involved in the process ofaccounting standards setting. The comprehensive incomereporting standard is used in this paper as an example of thesetypes of standard that may involve 'macro-manipulation'

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Last time updated on 29/10/2019

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