Analysis sets foundation for fairness in accounting and auditing practices.

TLDR:

Key Points:

• Fairness is identified as essential in accounting and auditing
• Researchers propose a framework for fairness in financial reporting

Nearly 40 years after Ijiri’s question about fairness in accounting was posed, researchers at Carnegie Mellon University have conducted an analysis to establish a framework for fairness in financial reporting. They looked into the ethical issues related to misrepresenting financial information and how it impacts ethical judgment in accounting. The study uses a game theoretic approach to address the ethical dilemmas of financial misrepresentation and proposes new perspectives on the fairness question. The researchers emphasize the importance of answering Ijiri’s question in advancing accounting research and practice.

Full Article:

In a new analysis by Carnegie Mellon University researchers, the concept of fairness in accounting and auditing is explored in depth. The study aims to establish a framework for ensuring fairness in financial reporting, a topic that has been neglected in accounting research for decades. Drawing on a combination of ethical theory, operations research, and game theory, the researchers propose a deontological game theoretic approach to address the ethical dilemmas of financial misrepresentation and its impact on ethical judgment in accounting.

The researchers emphasize the importance of addressing Ijiri’s question about fairness in accounting, as it remains relevant today. By applying the principles of generalization and game theory, the study delves into the ethical implications of manipulating financial information and seeks to clarify which types of manipulative financial statements can be ethically justified. The proposed framework offers new perspectives on the fairness question, paving the way for further research and practice in the accounting field.