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

Oliver Binz; Robert Hills; Matthew Kubic

doi:10.1111/1475-679x.12480

Journal of Accounting Research Vol. 61 No. 5 2023

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

Oliver Binz¹; Robert Hills²; Matthew Kubic³

¹ INSEAD Asia Campus · ² Smeal College of Business, Pennsylvania State University · ³ McCombs School of Business, The University of Texas at Austin ,

open access

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.

DOI: 10.1111/1475-679x.12480
Volume: 61
Issue: 5
Pages: 1479-1530
Language: en
Sources: bibtex:phds-export.bib openalex crossref

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

Abstract

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