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Understanding the changes in accounting thought

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  • Shortridge, Rebecca Toppe
  • Smith, Pamela A.

Abstract

Financial accounting and reporting are in the midst of one of the most significant revolutionary changes in modern history. The purpose of this paper is to provide a framework that will contribute to the dialogue surrounding these developments. We use Kuhn’s [Kuhn, T. S. (1970). The structure of scientific revolutions. Chicago, IL: The University of Chicago Press] framework on the theory of scientific revolution to describe how changes in the need for information, coupled with the lack of relevant accounting information, led to reporting anomalies that have spurred a revolutionary shift in accounting paradigms. We are moving from an accounting paradigm that existed in the age of an industrial economy to an accounting paradigm that fits the economy in an information age. This redirection has resulted in the following: a change in the conceptualization and application of relevance and reliability, an increased use of fair value versus historical cost measurements, a renewed emphasis on principles versus rules, and an evaluation of the composition of the basic financial statements.

Suggested Citation

  • Shortridge, Rebecca Toppe & Smith, Pamela A., 2009. "Understanding the changes in accounting thought," Research in Accounting Regulation, Elsevier, vol. 21(1), pages 11-18.
    • Handle: RePEc:eee:reacre:v:21:y:2009:i:1:p:11-18
    DOI: 10.1016/j.racreg.2008.11.010
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    References listed on IDEAS

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    1. J. Bradford DeLong & Lawrence H. Summers, 2001. "The new economy : background, historical perspective, questions, and speculations," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 11-43.
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    Cited by:

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    2. TOTH Kornel & HERCZEG Adrienn, 2015. "The Effect Of Globalization On Frameworks And Concepts In Accounting," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 968-975, July.
    3. Rodrigues, Lúcia Lima & Schmidt, Paulo & Santos, José Luiz dos, 2012. "The origins of modern accounting in Brazil: Influences leading to the adoption of IFRS," Research in Accounting Regulation, Elsevier, vol. 24(1), pages 15-24.
    4. Toth Kornel, 2014. "The Effect Of Derivative Financial Instruments On Bank Risks, Relevance And Faithful Representation: Evidence From Banks In Hungary," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 698-706, July.
    5. Rajat Deb & Mukesh Nepal & Sourav Chakraborty, 2023. "IFRS and Audit Quality: A Systematic Literature Review," Management and Labour Studies, XLRI Jamshedpur, School of Business Management & Human Resources, vol. 48(1), pages 118-138, February.
    6. Жиглей, Ірина Вікторівна & Юхименко-Назарук, Ірина Анатоліївна, 2017. "Розвиток облікової оцінки специфічних активів // Accounting valuation development of specific assets," Проблеми теорії та методології бухгалтерського обліку, контролю і аналізу // Problems of Theory and Methodology of Accounting, Control and Analysis, Житомирський державний технологічний університет // Zhytomyr State Technological University, vol. 38(3).
    7. Siniša Radić, 2018. "Impact Of Intellectual Capital On Profitability Of Commercial Banks In Serbia," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 63(216), pages 85-110, January –.
    8. Yoonki Rhee & Sejun Yoon & Hyunseok Park, 2022. "Exploring Knowledge Trajectories of Accounting Information Systems Using Business Method Patents and Knowledge Persistence-Based Main Path Analysis," Mathematics, MDPI, vol. 10(18), pages 1-22, September.
    9. repec:beo:journl:v:62:y:2018:i:216:p:85-110 is not listed on IDEAS
    10. Kovács, Zsuzsanna Ilona & Deák, István, 2012. "Accounting – Profession vs. Science," Public Finance Quarterly, Corvinus University of Budapest, vol. 57(4), pages 426-436.

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