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Accountability and Accounting Standards: The Effect of Providing Indicative but Incomplete Guidance Rules
Journal article   Open access   Peer reviewed

Accountability and Accounting Standards: The Effect of Providing Indicative but Incomplete Guidance Rules

Monte Wynder, Peter Baxter and Gregory Laing
e-Journal of Social & Behavioural Research in Business, Vol.3(1), pp.1-13
2012
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Abstract

Business and Management leases accounting standards judgement accountability
Purpose: This paper tests the interaction effects of education and accounting standard type (principles- or rules-based) for students who are exercising judgement in the face of accountability. Method: An experimental model is employed in which the type of accounting standard is manipulated. The effect of the type of accounting standard is then compared for students in introductory and final year accounting courses. Findings/Results: Our results indicate that the inclusion of indicative, but incomplete rules leads to increased conformance to pressure. Education improves the application of principles but incomplete rules continue to have a detrimental effect, even for students who have effectively completed their university studies. Implications: This research is important in providing guidance to the regulatory bodies as they determine the extent to which guidance rules should be included in new and revised accounting standards. It is also important to educators as they consider the effect of their teaching on the students' application of professional judgement.

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