IDEAS home Printed from
   My bibliography  Save this article

The role of accounting in the global financial crisis. Assumptions and realities


  • Neculai Tabara

    () (“Alexandru Ioan Cuza” University of Iasi)

  • Alina Rusu

    () (“Alexandru Ioan Cuza” University of Iasi)


The financial crisis prompted some players to denounce the role of financial markets "fair value accounting" required by the accounting rules used by the major listed companies in the world, U.S. GAAPs in the U.S. and IFRSs in Europe. This paper is related to the link between accounting and the global financial crisis. As technical research, we use the procedure of reviewing the literature. The criticism of fair value accounting are considering in particular two problems: the lack of liquidity (as may be assessed on the balance sheet financial instruments not traded in the market) and the pro-cyclicality (emphasizing the economic phases of expansion and recession). These difficulties are real, but the solutions offered - temporary or permanent modification of existing rules in order to limit the scope of this method of accounting – are not at all convincing. Although it is easy to identify gaps in fair value is still more difficult to propose an alternative option to respond more effectively to the requirements of relevance, reliability, comparison and understanding necessary for financial accounting rules In particular, the reference to historic price, often raised, would provide more than comparable and much less relevant.

Suggested Citation

  • Neculai Tabara & Alina Rusu, 2011. "The role of accounting in the global financial crisis. Assumptions and realities," EuroEconomica, Danubius University of Galati, issue 29, pages 16-22, August.
  • Handle: RePEc:dug:journl:y:2011:i:29:p:16-22

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Melvin, Michael & Taylor, Mark P., 2009. "The global financial crisis: Causes, threats and opportunities. Introduction and overview," Journal of International Money and Finance, Elsevier, vol. 28(8), pages 1243-1245, December.
    2. McSweeney, Brendan, 2009. "The roles of financial asset market failure denial and the economic crisis: Reflections on accounting and financial theories and practices," Accounting, Organizations and Society, Elsevier, vol. 34(6-7), pages 835-848, August.
    3. Sikka, Prem, 2009. "Financial crisis and the silence of the auditors," Accounting, Organizations and Society, Elsevier, vol. 34(6-7), pages 868-873, August.
    4. Laux, Christian & Leuz, Christian, 2009. "The crisis of fair-value accounting: Making sense of the recent debate," Accounting, Organizations and Society, Elsevier, vol. 34(6-7), pages 826-834, August.
    5. Humphrey, Christopher & Loft, Anne & Woods, Margaret, 2009. "The global audit profession and the international financial architecture: Understanding regulatory relationships at a time of financial crisis," Accounting, Organizations and Society, Elsevier, vol. 34(6-7), pages 810-825, August.
    6. Spence, A. Michael, 2009. "The financial and economic crisis and the developing world," Journal of Policy Modeling, Elsevier, vol. 31(4), pages 502-508, July.
    7. repec:eee:accfor:v:33:y:2009:i:2:p:114-126 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:dug:journl:y:2011:i:29:p:16-22. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Florian Nuta). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.