Legitimating Transnational Standard-Setting: The Case of the International Accounting Standards Board

Richardson, Alan J.; Eberlein, Burkard

doi:10.1007/s10551-010-0543-9

Cited by 161 publications

(131 citation statements)

References 57 publications

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“…Due to the complex and controversial nature of financial instruments reporting (Gebhardt, 2012), the accounting community and standard-setting bodies' credibility as an authority have been brought into question (Le Guyader, 2013). Hence, we should not be surprised if the Board allowed themselves to be guided by constituent opinion during the due process to maintain its perceived legitimacy (Richardson and Eberlein, 2011). The principal advantages of examining IFRS 7 are: first, documentation relating to meetings of the Board and technical working group was available covering the whole period; second, this is an area where there were strongly competing interests and conflicting opinions between stakeholders and across jurisdictions; and third, there have been ex-post criticisms of IFRS 7's requirements (Walton, 2004;Burlaud and Colasse, 2011;Harrington, 2012;Gebhardt, 2012).…”

Section: "The Genius Of the Fasb's Due Process Is The Cultivation Of mentioning

confidence: 99%

An examination of international accounting standard-setting due process and the implications for legitimacy

Bamber

McMeeking

2016

The British Accounting Review

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This paper explores the due process of accounting standard-setting by focusing on relative levels of stakeholder and jurisdictional influence. We draw on legitimacy theory to explain our findings and ask what implications any bias might have for the IASB. This study extends the standard-setting literature in three ways. First, we create a weighted coding system to analyse the content of comment letters. Second, we test for differences in the acceptance rate of comments made by stakeholders and by jurisdictions. Third, we analyse IASB discussion documentation that sheds light on the decision-making process. Previous studies have focused on whether outcome-oriented proposals are 'influential' (persuasive) by focusing on success rates measured as proposed changes being accepted. We widen this definition to include whether constituents' views are discussed. We find that accounting firms appear to have significantly less influence than other stakeholders. We also find that the IASB reacts less favourably to UK proposals but comments from the US are more likely to be discussed. A lack of fairness (real or perceived) could jeopardise perceptions of the procedural legitimacy of the due process and ultimately impair the IASB's cognitive legitimacy. Fogarty's (1994) review of the FASB standard-setting process identified a series of constraints, opportunities and dilemmas. The question of whether certain stakeholder groups hold greater levels of (relative) influence has been the subject of much work and researchers have studied this phenomenon in both domestic and international contexts (e.g. McEnroe, 1991, 1998; Kwok and Sharp, 2005; Cortese, Irvine and Kaidonis, 2010). Almost invariably, influence and legitimacy are considered together (Hussein and Ketz, 1991;McEnroe, 1993;Tutticci, Dunstan and Holmes, 1994;Suchman, 1995;Larson, 2002;Chua and Taylor, 2008;Burlaud and Colasse, 2011;Danjou and Walton, 2012). This paper reviews the IASB's standard-setting due process in relation to the complex and This study is motivated, at least in part, by criticisms of, and challenges to, the IASB's procedural legitimacy (e.g. Larson and Herz, 2013;Burlaud and Colasse, 2011; Kwok and Sharp, 2005). This is an important issue within an accounting standard-setting context. Procedural legitimacy is a type of moral legitimacy which can be created (lost), maintained, and built (impaired) according to levels of perceived independence and impartiality (Suchman, 1995). Suchman (1995) distinguishes legitimacy into three primary forms: pragmatic, moral and cognitive.

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Section: "The Genius Of the Fasb's Due Process Is The Cultivation Of mentioning

confidence: 99%

An examination of international accounting standard-setting due process and the implications for legitimacy

Bamber

McMeeking

2016

The British Accounting Review

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“…The Monitoring Board was created and governed by its own members, but, by means of a MoU, the trustees of the IFRS Foundation accepted to grant it specific rights of approval, specifically of the nomination of Foundation trustees and, subsequently, of the IASB chairman. It has been suggested (Richardson & Eberlein, 2011) that the IFRS Foundation accepted a Monitoring Board under strong pressure, in particular from the US SEC and the European Commission. CZ (2015, pp.…”

Section: The Monitoring Boardmentioning

confidence: 99%

“…Bengtsson, 2011). A Monitoring Board composed of national authorities would not necessarily eliminate the problem of multiple public-sector principals (Richardson & Eberlein, 2011). Subsequent research into the working and significance of the Monitoring Board appears to be limited, although Botzem (2014) characterized it as exercising a 'predominantly ceremonial oversight'.…”

Section: The Monitoring Boardmentioning

confidence: 99%

The Challenge of Setting Standards for a Worldwide Constituency: Research Implications from the IASB’s Early History

Camfferman

Zeff

2017

European Accounting Review

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Based on Camfferman and Zeff [(2015). Aiming for global accounting standards : The International Accounting Standards Board, 2001. Oxford: Oxford University Press] we reflect on possibilities for academic research on the International Accounting Standards Board (IASB) and its International Financial Reporting Standards (IFRSs). We argue that a research agenda may be formed around the notion that the IASB differs from national standard setters because its constituent base includes jurisdictions as well as the more traditional preparer, user and auditor constituency groups. We show that taking a jurisdictional angle draws attention to the variety among the IASB's jurisdictional constituents, identifying numerous research possibilities related to their decisions to adopt, or not to adopt, IFRSs, and to the mechanisms they have developed to form their own IFRS policies and to interact with the IASB. We illustrate how the IASB's structure, governance, processes and standards are influenced by the challenge of reconciling the needs and values of jurisdictional constituents with the objective of setting global accounting standards. We call for research on the ramifications of the diversity of jurisdictional constituents, as well as changing perceptions of standard setting within jurisdictions, for all aspects of the functioning of the IASB. Such research should make greater use of the variety of sources available to researchers today.

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“…16 Indeed, the European Parliament expressed concern in its endorsement instrument that segmental disclosures "must" be comparable (European Parliament, 2007), and that endorsement of IFRS had to have regard to the decision-useful criteria of European Commission Regulation (European Parliament, 2002). 17 This reflects user 'lack of' participation in the standard setting process (Sutton, 1984;Loft, Humphrey & Turley, 2006;Young, 2006;EC, 2007;Chiapello & Medjad 2009;Durocher & Fortin, 2011;Richardson & Eberlein, 2011;Botzem & Dobusch, 2012;Jorissen, Lybaert, Orens & Van der Tas, 2012). 18 The PWYP coalition is a group of non-governmental organisations and charities that campaign for greater transparency of payments paid by companies operating in the extractive industries to governments of developing countries.…”

Section: Insert Table 3 About Herementioning

confidence: 99%

The temporal nature of legitimation: the case of IFRS8

Crawford

Helliar

Power

2016

Accounting in Europe

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Legitimating Transnational Standard-Setting: The Case of the International Accounting Standards Board

Abstract: due process, accounting standard-setting, IASB,

Cited by 161 publications

References 57 publications

An examination of international accounting standard-setting due process and the implications for legitimacy

An examination of international accounting standard-setting due process and the implications for legitimacy

The Challenge of Setting Standards for a Worldwide Constituency: Research Implications from the IASB’s Early History

The temporal nature of legitimation: the case of IFRS8

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