Deloitte Report Recommends Creating a Judgment Framework to Help Remove Biases in Financial Decision-Making Process

Increased Use of Judgment across More Varied Parts of a Company Will Be Required With Pending Move to Principles-based International Financial Reporting Standards (IFRS)

Jan 26, 2010, 10:03 ET from Deloitte

NEW YORK, Jan. 26 /PRNewswire/ --

What:

"Judgment Sustained"

Who:

Shelley Barrows, partner, Deloitte & Touche LLP and Deloitte Idea Labs Fellow



When:

Available immediately



Where:

www.deloitte.com/us/idealabs



Details:

Shelley Barrows' "Judgment Sustained" research report focuses on the use of judgment frameworks for financial and accounting decisions.  The shift to International Financial Reporting Standards (IFRS) in the United States will move accounting in the U.S. from a rules-based approach to a principles-based approach that requires significant judgment.  As judgment can vary from individual to individual within an organization, long-term implications of the judgment and consistency are a concern.




In her research, Shelley Barrows defines a judgment framework as a set of principles, guidelines or good faith thought process that enable decision-makers to consider a situation holistically and drive more consistent decision-making.




When chief financial officers and financial managers acknowledge that biases exist in the financial decision-making process, a judgment framework can be developed for evaluating transactions and implemented as a key element of risk management and corporate governance.  




This report identifies the common judgment biases in the decision-making process and offers guidance about how companies can consider financial decisions more holistically in order to drive more consistent decision-making across their organization.


Please contact Francine Fiano at +1 203 708 4254 or  to arrange an interview with Shelley Barrows.

The report is one of several from Deloitte Idea Labs, which offer targeted research and perspectives aimed at helping companies gain insights on market trends and find solutions to key business issues.  More information about Deloitte Idea Labs can be found at www.deloitte.com/us/idealabs.

About Deloitte

As used in this document, "Deloitte" means Deloitte & Touche LLP and Deloitte Services LP, separate subsidiaries of Deloitte LLP.  Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.

SOURCE Deloitte



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