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Social Norms versus Standards of Accounting

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  • Shyam Sunder

Abstract

Historically, norms of accounting played an important role in corporate financial reporting. Starting with the federal regulation of securities, accounting norms have been progressively replaced by written standards. While social norms are maintained through an informal process of social as well as international sanctions, standards require more formal enforcement mechanisms, often supported by implicit or explicit power of the state to impose punishment. The spate of accounting and auditing failures of the recent years raise questions about the wisdom of this transition from norms to standards. Many aspects of family, local, professional, social, national and international behaviors continue to be governed by mechanisms in which norms play an important role. It is possible that the pendulum of standardization in acco

Suggested Citation

  • Shyam Sunder, 2005. "Social Norms versus Standards of Accounting," Yale School of Management Working Papers amz2525, Yale School of Management, revised 01 Sep 2005.
    • Handle: RePEc:ysm:wpaper:amz2525
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    File URL: https://repec.som.yale.edu/icfpub/publications/2525.pdf
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    References listed on IDEAS

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    1. Eisenberg, Melvin, 1999. "Corporate Law, Social Norms and Belief Systems," Berkeley Olin Program in Law & Economics, Working Paper Series qt1dh3j8qj, Berkeley Olin Program in Law & Economics.
    2. Posner, Richard A, 1997. "Social Norms and the Law: An Economic Approach," American Economic Review, American Economic Association, vol. 87(2), pages 365-369, May.
    3. Karim Jamal & Michael Maier & Shyam Sunder, 2005. "Enforced Standards Versus Evolution by General Acceptance: A Comparative Study of E‐Commerce Privacy Disclosure and Practice in the United States and the United Kingdom," Journal of Accounting Research, Wiley Blackwell, vol. 43(1), pages 73-96, March.
    4. Shyam NMI Sunder & Ronald A. Dye, 2001. "Why Not Allow the FASB and IASB Standards to Compete in the U.S.?," Yale School of Management Working Papers ysm192, Yale School of Management.
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