On the Possibility of Optimal Accounting Principles: A Restatement.
In this article the author remarks on the comments made by researcher Mary Bejan on his article on financial statements. He says that Bejan's comment on his article stems from two fundamental misinterpretations of it. First, she believes that the author limited his concern to the welfare of financial statement users, who she implies are a subset of the set of all individuals in society; in fact, the author's analysis considers all members of society to be users of financial statements. Second, she fails to understand the author's decomposition of the effect of a newly imposed accounting principle on the expected utility of an individual. He says that Bejan next proceeds to use a partial equilibrium analysis to explain what she calls the action and price effects of information. Public information disclosure will perturb an existing state of equilibrium and cause movement toward a new equilibrium. One way to analyze this movement is to assume that it proceeds in stages. Each stage is called a partial equilibrium because it represents an equilibrium only if certain assumptions are made about the absence of one or more effects.
- DOI
- 10.2308/tar-4492094
- Volume
- 56 (3)
- Pages
- 713-718
- Language
- en
- Export
- BibTeX
- Sources
- openalex crossref