Theories on Financial Reporting: Pre and Post Enron Developments

Impact of Accounting and Related Theories on Financial Reporting: Pre and Post Enron Developments

Following the collapse of Enron, a lot of comparisons were drawn between the principles based approach which existed in jurisdictions such as the UK, and the US rules based approach. A major problem regarding Enron was related to off balance sheet debt which resulted largely as a result of the direct observance of rules without the ability to consider the substance of underlying transactions -- a direct consequence of the prevailing rules based system. Amongst other objectives, this presentation and paper investigates whether Enron has really made a difference in the response to adopt International Financial Reporting Standards in the United States.