Abstract

This chapter examines different perspectives on the role of and need for the regulation of accounting information. Accounting information is distinguished in this chapter as information on the economic activities of the firm including information presented on the face of the financial statements as well as information disclosed in the footnotes to the financial statements or through other means of disclosure. This information can serve the role of communicating with both public and private sources, where ‘public’ in this sense refers to the debt and equity (capital) markets and ‘private’ refers to other, non-market providers of financing. The perspectives presented in this chapter focus primarily on regulation in jurisdictions in which the primary role of accounting information is its usefulness to shareholders in making investment decisions in the capital markets. However, the primary role of accounting information in many economies has been on information useful to other stakeholders and for purposes outside of capital market decision-making (i.e. stewardship, debt contracting, etc). The chapter also addresses the perspectives on such non-market roles of accounting information albeit to a lesser extent as globalization has in a large way shifted the focus of accounting information worldwide such that the capital market role of accounting information has become more and more relevant and, to a certain extent, reduced its non-market roles.