Over the last decade numerous accounting papers investigate the empirical relation between stock market values (or changes in values) and particular accounting numbers for the purpose of assessing or providing a basis of assessing those numbers’ use or proposed use in an accounting standard. We call the group of papers that are at least partially motivated by standard-setting purposes, the ‘‘value-relevance’’ literature. This paper’s objective is to critically evaluate the standard-setting inferences that can be drawn from these valuerelevance papers. The evaluation provides suggestions for future research for standard-setting purposes. Our evaluation concentrates on the accounting, standard-setting and valuation theories underlying the value-relevance literature’s standard-setting inferences. The reason is those inferences.
