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Assessing Conformity with Generally Accepted Accounting Principles Using Expert Accounting Witness Evidence and the Conceptual Framework
Author(s) -
Craig Russell,
Smieliauskas Wally,
Amernic Joel
Publication year - 2014
Publication title -
australian accounting review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.551
H-Index - 36
eISSN - 1835-2561
pISSN - 1035-6908
DOI - 10.1111/auar.12039
Subject(s) - accounting , accounting research , forensic accounting , conceptual framework , financial accounting , objectivity (philosophy) , impartiality , accounting standard , witness , positive accounting , conformity , business , accounting information system , political science , audit , sociology , law , epistemology , social science , philosophy
To enhance understanding of the status of the Financial Accounting Standards Board's Conceptual Framework for Financial Reporting , we analyse important rules of evidence in United States (US) courts regarding the presentation of expert accounting witness testimony. We draw on this analysis to recommend the relocation of the Conceptual Framework in the US Generally Accepted Accounting Principles (GAAP) hierarchy. For empirical support, we explore how rules of evidence in the criminal trial in 2006 of Enron's two most senior executives affected assessment of whether Enron's financial reports conformed with the FASB's GAAP. We recommend that the FASB's Conceptual Framework should be included in authoritative literature as the uppermost authority, and that it be grounded closely in user needs and the ethical principles associated with meeting those needs. Further, we recommend that accounting expert witnesses adopt an overriding concern for objectivity and impartiality in assisting courts to understand complex accounting matters within the Conceptual Framework .