In Defense of Stewardship

David Oldroyd, and Anthony D. Miller

The idea of stewardship as a prime objective of financial reporting appears to have been laid to rest by FASB and the International Accounting Standards Board (IASB) with the publication in 2010 of the first phase of their Conceptual Framework for Financial Reporting (see “Chapter 1, The Objective of General Purpose Financial Reporting,” and “Chapter 3, Qualitative Characteristics of Useful Financial Information”). The boards have maintained their original position, formulated before the current financial crisis broke, that the overriding purpose of financial reports is to provide information “that is useful in making decisions.” The notion of assessing stewardship—which is no longer referred to explicitly—is identified as a subset of assessing “an entity's prospects for future net cash inflows,” which is itself regarded as a subset of decision-usefulness.