Sorting and comparing: standard-setting and “ethical” categories

Joni Young, Paul Williams

Research output: Contribution to journalArticlepeer-review

31 Citations (Scopus)


The Financial Accounting Standards Board (FASB) describes its public interest function as “…developing standards that result in accounting for similar transactions and circumstances in a like manner and different transactions and circumstances…in a different manner (Facts about FASB).” This statement implies that rule-makers possess an expertise that makes analogizing transactions or circumstances to other transactions or circumstances unproblematic. In this paper we utilize two instances of standard-setting, SFAS 123R and SFAS 143, to demonstrate from FASB's analogic reasoning in these cases that similarity and dissimilarity are not so easily ascertained. A judgment about similarity invariably involves ignoring some perspectives of similarity that would lead to substantially different conclusions about the appropriate accounting. We also illustrate via the two examples the inherent value judgments that underlie the conclusions reached by FASB and how these value judgments raise questions about the ethics of the current standard-setting process.
Original languageEnglish
Pages (from-to)509-521
Number of pages13
JournalCritical Perspectives On Accounting
Issue number6
Publication statusPublished - Aug 2010


  • accounting standard setting
  • ethics
  • post-retirement benefits
  • regulation
  • stock options


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