Real options, enforcement of goodwill/intangibles rules, and associated behavioural issues

Abstract

Purpose

The purpose of this paper is to introduce new economic psychology theories that can explain fraud, misconduct and non-compliance that may arise from the implementation and enforcement of accounting standards codification (ASC) 805/350, international financial reporting standards (IFRS) 3R and IAS-38.

Design/methodology/approach

The approach is entirely theoretical. The paper analyzes existing theories about real options and enforcement of regulations/statutes, and introduces new psychological biases that can arise.

Findings

The real options approach suggested for handling the enforcement of goodwill/intangibles regulations is not effective.

Research limitations/implications

The research is limited to international accounting standards board (IASB)/IFRS and financial accounting standards board (FASB) accounting standards.

Originality/value

The critiques and theories developed in the paper can be used in the analysis of selection of disputes for litigation, anti-corruption programs and regulation of transactions that are susceptible to fraud.

Citation

Nwogugu, M. (2015), "Real options, enforcement of goodwill/intangibles rules, and associated behavioural issues", Journal of Money Laundering Control, Vol. 18 No. 3, pp. 330-351. https://doi.org/10.1108/JMLC-02-2014-0008