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May 2009 » Keep Politics Out of Accounting...
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Edward Trott
Financial reporting is the communication of financial information to the capital markets. The capital markets, made up of investors and lenders, use the information to make decisions. The accounting standards set forth the information to be provided in financial reporting. Accounting standards are not and should not be part of any government's fiscal policy or any regulator's monetary policy. These policies, along with tax and other laws created by governments, are designed to result in selected behaviors or activities. The setters of such policies and laws first identify the behaviors or activities that they want and then develop the policies or laws they think will result in those behaviors and activities.
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