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Unformatted text preview: rit of the general principle, I know who will win. “It
doesn’t feel good to me” is a really poor argument. “I just don’t like it” won’t carry much weight with
an audit committee either. An argument at the margin of a particular accounting treatment won’t be
influenced in the least by strong capital markets, any concern for S EC regulation, or a moments
thought of private litigation.
S omeone pushing for an imaginative accounting treatment will have already concluded the position
will obvi ousl y be accepted by the markets, the S EC, and the courts. All that is left is to persuade that
pesky audit partner that those silly rules do not prohibit this treatment. S uch is the power of
rationalization. The only people in the argument will be the CFO and the audit partner. Without the
backup of GAAP-based rules, the argument will be decided by whoever has the stronger personality.
And t hat is not an improvement in the reporting regimen.
By the way, how did that S EC enforcement work with Madoff? How did that fear of litigation work
with Tyco, WorldCom, HealthS outh, etc., ad nauseum? Transitioning from a rules-based GAAP
accounting model to a judgment- and principles-based IFRS will not be an improvement.
http://attestationupdate.com/2011/06/28/ar g uments- for - adopting - ifr s- ar e- weak- ar g uments- ag ainst- have- validity- ther efor e- we- obviously- should- adopt- ifr s/ 2/4 1/23/2014 Ar g...
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This document was uploaded on 03/06/2014.
- Spring '14