US accounting standards and their environment: A dualistic study of their 75-years of transition

This article examines the 75-year transition of the US accounting standards and their environment. It consists of three parts, each having two themes: Part (I) Past changes: 1. The first market crash and the second market crash; 2. Facts-based accounting and forecasts-based accounting, Part (II) Present issues: 3. The reform legislation (Sarbanes-Oxley Act) and the reform administration; 4. Procedural fairness and pure fairness, and Part (III) Future trends: 5. Forecast protection and forecast separation; 6. Principles-based systems and rules-based systems. These themes are each examined from dualistic perspectives by contrasting two fundamental concepts or principles. The article concludes with the strong need to focus on “procedural fairness” in establishing accounting standards as well as in implementing the reform legislation and administration, in contrast to “pure fairness” that is almost impossible to achieve by anyone.