International Financial Reporting Standards (IFRS) are less prescriptive than current US GAAP, and the interpretative guidance that is provided is more limited. More judgment is needed by managers in firms following IFRS, so this discussion question will become more relevant after US firms shift to IFRS.

Should judgments about financial reporting policies be affected significantly by concerns about the possible effects of behaviors of employees of the firm, or should they be chosen solely based on judgments about what is perceived to provide the best financial reporting disclosures?