An examination of international accounting standard-setting due process and the implications for legitimacy
Bamber, Matthew Alan; McMeeking, Kevin P.
Date: 17 April 2015
Journal
British Accounting Review
Publisher
Elsevier
Publisher DOI
Abstract
This paper explores accounting standard-setting by focusing on relative levels of stakeholder and jurisdictional influence in the financial instruments disclosure reporting due process. 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 ...
This paper explores accounting standard-setting by focusing on relative levels of stakeholder and jurisdictional influence in the financial instruments disclosure reporting due process. 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 success 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 standard-setting due process’ procedural legitimacy and ultimately the IASB’s cognitive legitimacy.
Finance and Accounting
Faculty of Environment, Science and Economy
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