Political grammars of justification and cost-benefit analysis in SEC rulemaking

Baudot, Lisa; Wallace, Dana

doi:10.1016/j.jaccpubpol.2023.107148

Journal of Accounting and Public Policy

2023

DOI: 10.1016/j.jaccpubpol.2023.107148

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Political grammars of justification and cost-benefit analysis in SEC rulemaking

Lisa Baudot,

Dana Wallace

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2024

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Cited by 2 publications

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Prospective evaluation of a new audit standard: Expert rhetoric and flexibility in cost‐benefit analysis

Donahue,

Malsch

2024

Contemporary Accting Res

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The objective of this research is to better understand experts' contributions to the prospective evaluation of a new audit standard—in this case, key audit matter (KAM) reporting. To this end, we assisted the Canadian Auditing and Assurance Standards Board by leading its consultation of 22 expert financial statement users. The methodology employed to observe our participants' opinions and cognitive processes involves thought protocol and interviews. By analyzing the rhetorical base of experts' prospective analysis, we show that our participants' arguments are often laden with postulates and lack data points, leading to generalizations. Sounder arguments entail more nuanced views but lead to uncertainties. We therefore highlight a tension between the rhetorical content of experts' insights and the calculative rationality of a cost‐benefit analysis. We also find that experts with less cognitive flexibility are less likely to be supportive of the adoption of a standard implying a change of habits in the way they process information. This tension and cognitive bias generate a significant interpretive challenge to determine a clear and dominant stance in the consultation. We discuss the implications of these findings for the legitimacy of prospective evaluations and the conduct of cost‐benefit consultations with experts. We also contribute to the literature on KAMs by substantiating concerns about the value of extended auditor reports to users.

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Prospective evaluation of a new audit standard: Expert rhetoric and flexibility in cost‐benefit analysis

Donahue,

Malsch

2024

Contemporary Accting Res

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Greenwashing on the Regulatory Agenda: How Regulators Make Greenwashing Governable

Peng,

Tan,

Zhou

2024

SSRN Journal

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Political grammars of justification and cost-benefit analysis in SEC rulemaking

Cited by 2 publications

References 77 publications

Prospective evaluation of a new audit standard: Expert rhetoric and flexibility in cost‐benefit analysis

Prospective evaluation of a new audit standard: Expert rhetoric and flexibility in cost‐benefit analysis

Greenwashing on the Regulatory Agenda: How Regulators Make Greenwashing Governable

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