West [West, B. (2003). Professionalism and accounting rules. London: Routledge] and Chambers [Chambers, R. J. (1966). Accounting evaluation and economic behavior. Houston: Scholars Book Company] have provocatively argued that financial reporting has reached a state of near-total incoherence. In this paper, we argue that a source of this incoherence is the transformation of the US accounting academy into a sub-discipline of financial economics, a transformation in which accounting became a servant of the imaginary world of neoclassical economics. After noting the unusually prominent role of rules within the accounting profession, we describe the displacement of accounting’s centuries-old root metaphor of accountability by the metaphor of information usefulness, and situate that displacement within neoliberalism, a broader political movement that arose after World War II. Finally, we use SFAS 123R, the recently issued stock option standard, as a case study of the incoherence that West and Chambers assert. Through various issues – such as reflexivity, theory paradox, and unexplained questions of responsibility – we demonstrate the logical inconsistencies involved in SFAS 123F. The incoherence of stock option reporting rules raises serious questions about the information metaphor as a foundation for either individual rules or the standard setting process. The Financial Accounting Standards Board’s (FASB) attempts to make the imaginary world of neoclassical economics real have resulted in rules which are not defensible. “We may start with a simple observation: so far as modern scientists know no one, not even the most adapt (sic) fakirs and clairvoyants, have ever learned anything from the future (all emphases in original)” Carl Thomas Devine (1962, p. 13). In his critique of current accounting theory, West observed that accounting failures and public relations crises tend to precipitate “calls for formally stated accounting rules,” (2003, p. 106). A highly salient and contentious example of the accounting profession’s rule-making response is the recent well-publicized battle over accounting for stock options in the US. The history of stock option accounting is the history of an accounting problem never solved. In the US the use of stock options was blamed as a key feature of the irrational exuberance driving the stock bubble of the late 1990s (Berenson, 2003 and Walters and Young, 2008); when that bubble burst, the stock market declined dramatically. As a way to restore the public’s confidence in capital markets, legislators and public accounting rule-makers seized upon changing the required accounting for stock options, exhibiting a conventional faith that disclosing the magnitude of such compensation to market participants would lead to market solutions to the problem. Instead of asking whether stock option abuses could be addressed more effectively by taxation or other regulations, the accounting profession created yet another complicated rule to provide greater “transparency.” If legislators and rule-makers could create new rules to address the abuse of stock options, then perhaps less attention would be paid to deeper, more systemic problems underlying the practice and structure of capital markets and of public accounting. We use the FASB’s rules on stock option accounting (Statement of Financial Accounting Standards 123R, henceforth SFAS 123R) as a case study illustrating the incoherence of accounting that West (2003) describes. We look first at the unusually prominent role of rules in public accounting. We then describe the current root metaphor (information) which provides the underlying rationale for the form and content of accounting rules and explore the earlier metaphor it explicitly replaced. We then look at how the metaphor of information usefulness emerged in the US and contributed to the formation of current stock option reporting rules. We expose the internal contradictions within stock option reporting rules, which arise because of theoretical weaknesses underlying the current information usefulness metaphor. Finally, we briefly look at what we believe the resulting incoherence within the stock option reporting rules tells us about accounting theorizing and standard setting.