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The Accounting Court: Some Speculations on Why Not?

Author

Listed:
  • Gary Kleinman

    (Montclair State University)

  • Pamela Strickland

    (Methodist University)

  • Asokan Anandarajan

    (New Jersey Institute of Technology)

Abstract

The accounting court proposed by Spacek (Account Rev 33(3):368, 1958) was a potent and controversial idea. The court would provide a venue to which auditing firms and clients could bring disputes over the application of accounting principles and over time would build a database of casework illustrating the court’s decisions on proper application and interpretation of accounting principles. In this paper, we contribute to the literature on the accounting court and on standard setting by analyzing group value orientations and motivations that should promote the likelihood of an accounting court appearing in these times. We base our analysis in value group theory (Shakun 1988 Evolutionary systems design: policymaking under complexity and group group decision support systems. Holden-Day, Oakland, CA.), an analysis rooted in an examination of operational and terminal values of key participants. The analysis brings to light a contradiction between the terminal values of the key players and the actions of those players. We argue that common conditions of existence came between the operational goals and terminal values in the accounting domain and key actors willingness to seek the specified values. This analysis provides a flexible but powerful tool for analyzing motivations that may influence behavior of key organizations in the accounting domain.

Suggested Citation

  • Gary Kleinman & Pamela Strickland & Asokan Anandarajan, 2016. "The Accounting Court: Some Speculations on Why Not?," Group Decision and Negotiation, Springer, vol. 25(4), pages 845-871, July.
    • Handle: RePEc:spr:grdene:v:25:y:2016:i:4:d:10.1007_s10726-015-9456-4
    DOI: 10.1007/s10726-015-9456-4
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    References listed on IDEAS

    as
    1. Kleinman Gary & Anandarajan Asokan & Palmon Dan, 2012. "Who's to Judge? Understanding Issues of Auditor Independence Versus Judicial Independence," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 2(1), pages 1-52, August.
    2. Ray Ball, 2009. "Market and Political/Regulatory Perspectives on the Recent Accounting Scandals," Journal of Accounting Research, Wiley Blackwell, vol. 47(2), pages 277-323, May.
    3. Gary Kleinman & David Hossain, 2009. "Issue Networks, Value Structures and the Formulation of Accounting Standards: An Exercise in Theory Building," Group Decision and Negotiation, Springer, vol. 18(1), pages 5-26, January.
    4. Gary Kleinman & Asokan Anandarajan & Ann Medinets & Dan Palmon, 2010. "A theoretical model of cognitive factors that affect auditors' performance and perceived independence," International Journal of Behavioural Accounting and Finance, Inderscience Enterprises Ltd, vol. 1(3), pages 239-267.
    5. Gary Kleinman & Dan Palmon, 2000. "A Negotiation-Oriented Model of Auditor-Client Relationships," Group Decision and Negotiation, Springer, vol. 9(1), pages 17-45, January.
    6. Paul F. Williams & Sue P. Ravenscroft, 2015. "Rethinking Decision Usefulness," Contemporary Accounting Research, John Wiley & Sons, vol. 32(2), pages 763-788, June.
    7. Dan Palmon & Marietta Peytcheva & Ari Yezegel, 2011. "The Accounting Standards Setting Process in the U.S.: Examination of the SEC–FASB Relationship," Group Decision and Negotiation, Springer, vol. 20(2), pages 165-183, March.
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    Cited by:

    1. Gary Kleinman & Dan Palmon, 2023. "A Values-based Approach to Understanding Corporate- Stakeholder Interactions," Group Decision and Negotiation, Springer, vol. 32(2), pages 301-326, April.

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