How can Empirical Research Contribute to Accounting Standards Setting?

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Through my research during the years 2006 and 2007, I have been able to provisionally conclude the following: Intrinsically, empirical research does not foresee future prospects but only explains past facts. However, it is necessary for accounting standards setters to recognize the current situation and to forecast future developments based on past facts that are based on empirical data. This is because norms are usually constructed after people acknowledge something to be a reality, but this created reality is sometimes wrong because it is dependent on individual value judgments. Although empirical research and normative research are generally assumed each other, their relationship where accounting standards are concerned is not so simple. There have been cases in which accounting standards have been set that completely ignored the results of large amounts of empirical research. There have also been cases in which accounting standards have been set based on a few primitive empirical research reports. A typical case of the former was when the IASB prohibited the disclosure of net income, despite the fact that most empirical research results indicated a value relevance of net income for investor decision making. A typical case of the latter was the accounting standards for R&D investment in the US, which required companies to expense all R&D investment, a standard based on very little empirical evidence. Empirical and normative research are not assumed to be each other in actuality: One of them is weighed more heavily or is chosen for use as the rationale for a standard depending on special interests or in some cases the chairperson's personal belief. Moreover, interested persons or agents who advocate an opinion towards accounting standards setting often present biased results of empirical study that are advantageous to them: The results of empirical research studies are often different due to differences in sampling and analytical methods.