The IASB standard-setting process: Participation and perceptions of financial statement users

Georgiou, George

doi:10.1016/j.bar.2010.02.003

Cited by 101 publications

(76 citation statements)

References 28 publications

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“…Puro, 1984;Willmott, 1986;McLeay, Ordelheide, and Young, 2000;Cortese, Irvine and Kaidonis, 2010). Their strength is thought to derive from being alumni in the decision-making process as well as their knowledge, expertise, experience, resources and IASC (IFRS) Foundation funding levels (US Senate Metcalf Committee Report, 1976;Puro, 1984;Cooper and Sherer, 1984;Hussein and Ketz, 1991;Mitchell and Sikka, 1993;Georgiou, 2010;Financial Reporting Council, 2012).…”

Section: Stakeholder Groupsmentioning

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: Stakeholder Groupsmentioning

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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“…According to Durocher, Fortin and Côté (2007) and Georgiou (2010), the main purpose of user participation in the process of issuing standards of the IASB is to achieve financial statements with relevant and transparent information for decision making. Saemann (1999) believes that users of financial information have a greater interest in uniform financial statements, since this increases comparability between companies, making the financial information more noticeable.…”

Section: Methodsmentioning

confidence: 99%

“…There are numerous studies that evaluate the participation of stakeholders groups in the standardization processes of the Financial Accounting Standards Board (FASB), the IASB, and the Accounting Standards Board (ASB) in the United Kingdom (Tandy & Wilburn, 1996;Georgiou, 2010;Zülch & Hoffmann, 2010;Jorissen et al, 2006;Giner & Arce, 2012;Holder et al, 2013;Huian, 2013). Tandy and Wilburn (1996) were pioneers in this kind of research by analyzing the participation of academics in the procedures for issuing the standards from the FASB.…”

Section: Theoretical Frameworkmentioning

confidence: 99%

“…Relationships were found between the proposed amendments and modifications made to the ED that resulted in the final standard, something which suggests that the FASB takes into account the opinions expressed. Georgiou (2010) analyzes the answers to a questionnaire related to participation in the IASB processes to issue standards by investment management firms in the United Kingdom. The study reveals that participation in this kind of company is not as low as it is thought to be, because some companies participate through representative agencies, such as associations of investment management firms and that the factor inhibiting these companies to participate is the cost involved in participation.…”

Section: Theoretical Frameworkmentioning

confidence: 99%

“…The studies on which provided this article with a basis examined the answers sent to standard setters from various perspectives: Tandy and Wilburn (1996) address the participation of academics; Georgiou (2010) analyzes the participation of investment management firms; authors such as Jorissen et al (2006), Orens, Jorissen, Lybaert andVan Der Tas (2011), andHolder, Karim, Lin andWoods (2013) relate the answers obtained with factors such as culture, tax system, countries' characteristics or whether the use of IFRS is required or permitted in respondents' country of origin Huian (2013) examines which are the most participatory stakeholders groups and Carmo, Mussoi and Carvalho (2011) analyze the impact of comments in the process of issuing the standards from the viewpoint of potential groups of interest associated with the process (lobbying).…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

An Analysis of Differences in Terms of Professional Interests Based on the Project to Replace IAS 39

Carvalho

Albuquerque

Quirós

et al. 2015

Rev. contab. finanç.

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The professional interests of the various stakeholders groups are often seen as obstacles to full accounting harmonization. Studying different professional interests in the accounting domain is significant for organizations involved in the international accounting harmonization process, insofar as it enables them to identify the main obstacles to face in order to achieve full harmonization. Thus, this article is aimed at analyzing the differences in terms of professional interests by addressing the participation of various stakeholders groups in the process of issuing/modifying standards of the International Accounting Standards Board (IASB). Based on content analysis, we examined the comment letters sent to the IASB in the context of the first part of the first phase of the project to replace the International Accounting Standard (IAS) 39, entitled "Financial Instruments -Recognition and Measurement", by the International Financial Reporting Standard (IFRS) 9, on its turn entitled "Financial Instruments". Respondents were identified according to the stakeholders group, and, later, the collected data underwent a nonparametric chi-square test. The results of this study indicate there are significant differences between the answers obtained from the various stakeholders groups involved in the process of issuing or reviewing a standard of the IASB, above all made clear between the group of financial preparers and the regulatory and/or standard-setting agencies and the professional associations related to accounting.

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National Standard-Setters’ Lobbying: An Analysis of its Role in the IFRS 2 Due Process

Inchausti

Arce

2014

Accounting and Regulation

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The IASB standard-setting process: Participation and perceptions of financial statement users

Cited by 101 publications

References 28 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

An Analysis of Differences in Terms of Professional Interests Based on the Project to Replace IAS 39

National Standard-Setters’ Lobbying: An Analysis of its Role in the IFRS 2 Due Process

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