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Social Norms versus Standards of Accounting


  • Shyam Sunder


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:somwrk:amz2525

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    References listed on IDEAS

    1. Sunder, Shyam, 2002. "Regulatory competition among accounting standards within and across international boundaries," Journal of Accounting and Public Policy, Elsevier, vol. 21(3), pages 219-234.
    2. repec:aei:rpbook:53576 is not listed on IDEAS
    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.
    5. Ellickson, Robert C, 1998. "Law and Economics Discovers Social Norms," The Journal of Legal Studies, University of Chicago Press, vol. 27(2), pages 537-552, June.
    6. 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.
    7. Shyam Sunder, 2003. "Management Controls, Expectations, Common Knowledge and Culture," Yale School of Management Working Papers ysm337, Yale School of Management.
    8. Sunder, Shyam, 2002. "Regulatory competition for low cost-of-capital accounting rules," Journal of Accounting and Public Policy, Elsevier, vol. 21(2), pages 147-149.
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    Cited by:

    1. Shizuki Saito, 2011. "Accounting Standards and Global Convergence Revisited: Social Norms and Economic Concepts," The Japanese Accounting Review, Research Institute for Economics & Business Administration, Kobe University, vol. 1, pages 105-117, December.
    2. Murphy, Tim & O’Connell, Vincent & Ó hÓgartaigh, Ciarán, 2013. "Discourses surrounding the evolution of the IASB/FASB Conceptual Framework: What they reveal about the “living law” of accounting," Accounting, Organizations and Society, Elsevier, vol. 38(1), pages 72-91.
    3. Shyam Sunder, 2011. "Paradox of Writing Clear Rules: Interplay of Financial Reporting Standards and Engineering," The Japanese Accounting Review, Research Institute for Economics & Business Administration, Kobe University, vol. 1, pages 119-130, December.

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