Scientific literature discusses why companies to make voluntary changes in accounting principles, and the practice continues with the change might be appropriate and when. Regulators have continued the requirement that public companies file indicates preferability letters with the Securities and Exchange Commission, the auditor support for the particular change set. Representative profile of these letters from 1992 to 2004 leads to recipes that address the practical challenges and the expectations of supervisors. Broad … Read more »

Scientific literature discusses why companies to make voluntary changes in accounting principles, and the practice continues with the change might be appropriate and when. Regulators have continued the requirement that public companies file indicates preferability letters with the Securities and Exchange Commission, the auditor support for the particular change set. Representative profile of these letters from 1992 to 2004 leads to recipes that address the practical challenges and the expectations of supervisors. Broad policy questions include whether such changes should be approved and what considerations independence arise as managers, directors, auditors and regulators to discuss and sometimes disagree on the preferred accounting principles.
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Wanda A. Wallace
Source: Business Horizons
12 pages.
Publication Date: Sep 15, in 2006. Prod #: BH210-PDF-ENG
Findings from preferability Letters HBR case solution

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