Due process and the development of financial accounting standards: An exploration of comment letters and their influence on financial accounting standards.

摘要

The business community and public are extended the opportunity to participate in the development of financial accounting standards (FAS). Stakeholders are concerned about the reliability of due process provisions for meaningful public participation in changing FAS. This study employed the conceptual framework of due process as explicated within the generally accepted accounting principles (GAAP) doctrine and incorporated in the Financial Accounting Standards Board (FASB) procedures to insure responsiveness and credibility of the system. This research sought to determine if the FASB considers comments received from constituents as part of its due process procedures. Using a random, qualitative, cross-case analysis design, the comment letter component of due process was examined to determine if textual evidence supports or contradicts the legitimacy of the role of due process procedures in FASB decision making. Two FAS projects were randomly selected and then a predetermined number of comment letters were randomly selected from each FAS project. The material aspects from each comment letter were traced to actual FASB discussions, public meetings, or roundtables to validate prior research, which utilized nonrandom sampling techniques apparently without triangulation. In this textual examination of all relevant documents associated with the two random cases, the FASB was found to follow their established due process protocol. This research validates and builds upon prior research and provides triangulation. The public's voice was duly considered justifying confidence in FASB's due process procedures. The study contributes to social change by providing empirical evidence that can be used to support information programs designed to increase stakeholder confidence regarding due process procedures followed by the FASB.