In the 1990s, the FASB considered making a new rule to count stock option awards by companies as expenses. Some companies protested to the FASB, and to Congress, and the FASB at that time decided not to make the new rule. This is an example of what type of reaction to accounting measurement?
A) Acting to modify the measurement system before it goes into effect
B) Doing what is desired in response to being measured
C) Doing what looks good on the measurement system, even though it was not what was actually desired
D) Lying

Question

Quizplus · Accepted Answer

This is an example of companies taking action to modify the accounting measurement system before it goes into effect by protesting to the FASB and Congress.

In the 1990s, the FASB Considered Making a New Rule