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A RATIONAL RECONSTRUCTION OF THE DECISION‐USEFULNESS CRITERION
Author(s) -
Puxty Anthony G.,
Laughlin Richard C.
Publication year - 1983
Publication title -
journal of business finance and accounting
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.282
H-Index - 77
eISSN - 1468-5957
pISSN - 0306-686X
DOI - 10.1111/j.1468-5957.1983.tb00452.x
Subject(s) - welfare , economics , mathematical economics , positive economics , market economy
Most prescriptive external accounting is based upon the notion of increased welfare, and all existing accounting theory is predicated upon the decision‐usefulness criterion. This paper challenges the application of this criterion by demonstrating that it need not (as such theory implies) lead to enhanced welfare, and evidence is presented to support this. It presents instead a model for external accounting which is founded on an enriched model of welfare and is contingent on varying levels of societal environmental complexity.