On The Legitimacy Of Accounting Standard Setting By Privately Organised Institutions In Germany And Europe
AbstractRecent developments in German and European accounting regulation show a growing relevance of accounting rules set by privately organised institutions. This article refers to those developments. It analyses the institutional legitimacy of accounting standard setting by private authorities, using an economic approach based on the concept of hypothetical consent. Legitimacy concerns occur particularly for the German standard setter, since we cannot preclude various conflicting interests. The article provides suggestions for the German legislature to mitigate the problem and to facilitate the instalment of structural safeguards that can assure a legitimate standard setting process. The paper also discusses in what way it is possible to utilize the merits of regulatory competition as an additional safeguard to maintain legitimacy of private standard setting bodies. Regulatory competition among different standard setters in Europe is particularly considered to be an alternative to a harmonisation of accounting rules on the basis of one single set of standards as intended in a recent EU Commission’s proposal.
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Bibliographic InfoArticle provided by LMU Munich School of Management in its journal Schmalenbach Business Review.
Volume (Year): 54 (2002)
Issue (Month): 2 (April)
Find related papers by JEL classification:
- K29 - Law and Economics - - Regulation and Business Law - - - Other
- M40 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - General
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- Fülbier, Rolf Uwe & Klein, Malte, 2013. "Financial accounting and reporting in Germany: A case study on German accounting tradition and experiences with the IFRS adoption," Bayreuth Working Papers on Finance, Accounting and Taxation (FAcT-Papers) 2013-01, University of Bayreuth, Chair of Finance and Banking.
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