Characteristics influencing perceptions of accounting pronouncement quality

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). It relates pronouncement qualities described in previous literature directly to comments on actual pronouncements made by respondents familiar with pronouncement use. The review of previous literature suggests that desirable or normative characteristics of accounting pronouncements can be categorized as informational, operational, and formational in nature. It finds that informational characteristics tend to dominate FASB constituents' explanations of their rankings of the best and worst accounting pronouncements, with operational and formational characteristics carrying relatively larger weights in the rankings of worst pronouncements.