Burdens of Proof in Accounting Standards

Started to develop this in 1987:

87 Conference Paper – Burdens of Proof in CICA Handbook

Paper presented at conference of the Canadian Academic Accounting Association. As a fake professor at the time, needed guidance as to follow-up, and didn’t.

Basic idea that since the establishment of accounting standards involves delegated legislative authority, such standards need to be interpreted from a legal perspective, where there are two basic burdens of proof: beyond reasonable doubt, and balance of probabilities. Found that, at the time, most Canadian accounting standards were of the balance of probabilities variety. This means 50% plus 1, not 80%.

Yet in the recent criminal trial of the Nortel executives, relating to the appropriate treatment of accruals, there was testimony as to some 70% or so range.

All of the executives were acquitted. Accounting standard-setters, with their delegated legislative authority, do not establish their own burden of proof.

So, nearly thirty years later…


About brucelarochelle

Practising Lawyer and Part-Time University Instructor (Accounting, Commercial Law, Organizational Behaviour); Part-Time Federal Tribunal Member. Non-practising Chartered Professional Accountant (Chartered Accountant and Certified Management Accountant).
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