Making Up Users

Accounting, Organizations and Society 31 (2006) 579–600 www.elsevier.com/locate/aos

Making up users

Joni J. Young

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Anderson Schools of Management, MSC 05 3090, 1 University of New Mexico, Albuquerque, NM 87131, United States

Abstract Within recent years, financial statement users have been accorded great significance by accounting standard-setters. In the United States, the conceptual framework maintains that a primary purpose of financial statements is to provide information useful to investors and creditors in making their economic decisions. Contemporary accounting textbooks unproblematically posit this purpose for accounting. Yet, this emphasis is quite recent and occurred despite limited knowledge about the information needs and decision processes of actual users of financial statements. This paper unpacks the taken-for-grantedness of the primacy of financial statement users in standard-setting and considers their use as a category to justify and denigrate particular accounting disclosures and practices. It traces how particular ideas about financial statement users and their connection to accounting standard setting have been constructed in various documents and reports including the conceptual framework and accounting standards. Ó 2006 Elsevier Ltd. All rights reserved.

The conceptual framework of the Financial Accounting Standards Board (FASB) specifies a very particular and narrow purpose for financial reports: the provision of information useful in making economic decisions. Consider the following definitions or descriptions of accounting that are found within two widely used intermediate accounting textbooks: . . . the objectives of financial reporting are to provide (1) information that is useful in investment and credit decisions, (2) information that is useful

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in assessing cash flow prospects, and (3) information about enterprise resources, claims to those resources, and changes in them (Kieso, Weygandt, & Warfield, 2004). The primary function...