ABSTRACT
This chapter opens with the suggestion that a possible reason for the findings that Canadian standard setters gave a low ranking to the political element of their role is that, until recently, choices between accounting policy alternatives have not been perceived to have great economic effects. No one will go to the trouble of demanding a particular accounting disclosure or refuse to provide it unless the perceived economic incentive is large enough to warrant the effort. The low ranking for economic effects is suggested as a factor in standard-setting decisions because the Accounting Research Committee respondents themselves did not recognize that possible economic effects played a part in their decisions. The thinking of many Committee members is too much oriented to dealing with accounting issues by following rules and to pursuing the belief that there is one right answer, so that economic effects are viewed as largely irrelevant.
