Over the last forty-five years, U.S. standard setters have changed their perceptions about the primary users and basic objectives of corporate financial reporting. Formerly, it was providing information to a variety of users for a variety of purposes. Presently, it is usefulness for making resource allocation decisions by existing and potential investors and creditors. Standard setters view other stakeholders as secondary users and accountability as a secondary and distinctly subservient objective. This paper documents how and why standard setters have narrowed their perceptions. It examines some reasons for this narrowing not considered by standard setters, including undue influence of financial report preparers and auditors, regulatory capture, and resistance to accountability while giving account. It also examines some implications of this change in perceptions on the future development of financial reporting and the prospects of attaining a long-term consensus on its basic objectives.
