Knowledge that Transforms

Abstract ABSTRACT: This paper provides a critical review of the FASB's Statement on Objectives and of its Exposure Draft on the elements of financial accounting. First, the FASB's statements are compared with those of the previous authoritative bodies. Little that is new and little that can be expected to aid in the resolution of accounting issues can be found in the FASB's Statements. If the previous authoritative statements on objectives (and conceputal framework) can be adjudged failures, there is reason to believe that the present effort will have a similar future. Second, the reasons for such failure are considered and it is found that objectives of financial accounting do not have an unambiguous interpretation. Several explanations as to why accountants continue to seek an authoritative definition of objectives (and conceptual framework) are offered and some modest proposals for the "objectives of the FASB" are discussed at the end of the paper.

Abstract ABSTRACT: In recent years, there has been an increasing interest in the communication and reporting by large corporations on their social performance. Most of the attention has been devoted to either the need or the appropriate mode for corporate social disclosure. This study attempts to assess the impact of the capital markets of the social disclosure that already exists on a voluntary basis. The returns to portfolios composed of securities of socially disclosing firms are compared to the returns to portfolios of equivalent (systematic) risk composed of securities of non-disclosing firms. The findings indicate that social disclosure has information content and that the market values this disclosure positively.