The role of expectancy theory and observed constituency response levels to exposure drafts in accounting standard-setting in New Zealand

Abstract

A brief history of studies of standard setting and constituency lobbying is summarised, and a description of standard setting in New Zealand is provided. Historically, levels of responses to exposure drafts in New Zealand indicate there is no clear existing body of theory to clarify the factors contributing to the pattern in responses to exposure drafts in the last twenty years. The historic longitudinal data from New Zealand exposure drafts exhibited a pattern which could be described as consistently low with two major fluctuations. An alternative approach (expectancy theory) is explored. It is proposed that the response level in New Zealand was generally low over time because there is not a sufficient belief by stakeholders that the Board will change the resulting standard sufficiently to ensure making a submission is cost-benefit efficient. It is suggested that the fluctuations represent periods when there were changes in expectancy by participants of their potential influence on due process.