Context-Dependence of Auditors' Interpretation of the SFAS No. 5 Probability Expressions
Posted: 27 Feb 1998
Date Written: VOL 12, NO 1, FALL 1996
Abstract
SFAS No. 5 requires accrual of contingent losses which are deemed "probable." This disclosure criterion is intended to be applied uniformly across a variety of contexts. We performed an experiment which examined whether audit managers' interpretations of the SFAS No. 5 probability expressions are influenced by one contextual feature event base rate. Counter to the intention of the FASB interpretations of the expression probable were positively associated with event base rate.
JEL Classification: M41
Suggested Citation: Suggested Citation
Amer, Tarek S. and Hackenbrack, Karl and Nelson, Mark W., Context-Dependence of Auditors' Interpretation of the SFAS No. 5 Probability Expressions (VOL 12, NO 1, FALL 1996). Available at SSRN: https://ssrn.com/abstract=55459
Feedback
Feedback to SSRN
If you need immediate assistance, call 877-SSRNHelp (877 777 6435) in the United States, or +1 212 448 2500 outside of the United States, 8:30AM to 6:00PM U.S. Eastern, Monday - Friday.