Effective capital markets rely on financial information mandated by high-quality accounting pronouncements. This study identifies characteristics associated with the quality of pronouncements issued by the Financial Accounting Standards Board (FASB). We relate pronouncement qualities described in previous literature directly to comments on actual pronouncements made by respondents familiar with pronouncement use. Our review of previous literature suggests that desirable or nor mative characteristics of accounting pronouncements can be categorized as informa tional, operational, and formational in nature. We find that informational characteris tics tend to dominate FASB constituents' explanations of their rankings of the best and worst accounting pronouncements, with operational and formational characteris tics carrying relatively larger weights in the rankings of worst pronouncements.
- Accounting pronouncements