Evidence‐based financial reporting regulation

Abstract

In this introductory paper at the Abacus Forum on International Financial Reporting, I contend that it is difficult to argue that financial reporting and disclosure regulation around the world is evidence‐based. Anecdotes and references to more systematic research and surveys of research are used to demonstrate this. ‘Evidence‐based’ is a term that I borrow from medicine. There the term stands for basing medical patient care and health policy choices on the ‘current best [scientific] evidence’. I contend that financial reporting and disclosure regulation (and perhaps practice as well) are currently not evidence‐based in the specific sense of not being based on the current best scientific evidence available about accounting and auditing. Next I discuss possible causes of this state of affairs and look at future possibilities for financial reporting and disclosure regulation to become (more) evidence‐based. The discussion ends by providing a link with the papers that follow in this issue.