The role of accounting in bringing on the ongoing economic crisis is a widely debated topic. Some hold accounting standards requiring fair value accounting responsible for unduly distorting the health of companies' balance sheets
and contributing to a negatively reinforcing downward spiral. Others argue that accountants are often scapegoats for investors' excesses as was the case in the United States in 1929 crash when accountants were accused of putting water on the balance sheet in the 1920s. Compelling arguments may be found on both sides. It is hard to pinpoint the blame for such a monumental crisis on any specific factor, nonetheless the fact remains that accounting standards of reporting financial performance play a vital role in guiding important economic decisions at the firm level.