An Economic Analysis of the Chambers' Normative Standard.

Abstract The article presents an economic analysis of scholar R.J. Chambers' normative standards by the author. Chambers raises the issue with the notion that not all choices between accounting or information alternatives can be rationalized without admitting individual preferences, beliefs and opportunities into the analysis. His argument is that a form or type of accounting that is preferred to all others does indeed exist and that choice between any pair of inferior alternatives rests upon whose product most closely approaches, that of the preferred form or type. Such belief and attendant prescription are the essential cornerstone in the approach taken to accounting theory that many, including Chambers, follow. An alternative approach, one that some of us follow, is based on economic analysis of accounting alternatives. No universally preferred alternative is posited and preferences, beliefs and opportunities provide the essential cornerstone in the analysis. In short, resolution in the economic domain is ultimately based on aspects of the problem that are not admitted in the universality or necessity approach.