Unreliable Accounts: How Regulators Fabricate Conceptual Narratives to Diffuse Criticism

Abstract In 2010, the U.S. accounting rulemaker (FASB) updated its longstanding constitution to eliminate “reliability” as a fundamental property. FASB argued that was misunderstood in practice and this amendment clarified original intent. Drawing on primary archival resources field interviews with regulators, I provide evidence change also sought legitimize rise of fair-value accounting. By eliminating need for be “reliable,” attempted neutralize concerns about subjectivity estimates. Such can facilitate manipulation, some rules attributed lobbying by managers who stand benefit. The illustrates “conceptual veiling,” wherein seeking diffuse criticism, including suspicions capture, manufacture costly conceptual narratives justifying their actions.