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Formal Participation in the IASB's Due Process of Standard Setting: A Multi-issue/Multi-period Analysis

Author

Listed:
  • Ann Jorissen
  • Nadine Lybaert
  • Raf Orens
  • Leo Van Der Tas

Abstract

This paper sets out to enquire about the nature of constituents' participation in the IASB's due process in terms of representation (constituents' diversity and characteristics) and drivers to participate. We choose to adopt a multi-issue/multi-period approach to investigate constituents' formal participation. An analysis of comment letters sent directly to the IASB over the period 2002--2006, reveals that preparers sent most letters followed by the accounting profession and standard setters. With regard to timing, we find that preparers concentrate their participation efforts at a later stage in the process compared to the other constituents, who react earlier. Formal indirect participation in the IASB's due process by submitting comment letters to EFRAG is infrequently used by European constituents. In those cases where constituents exert influence to both IASB and EFRAG, they often use exactly the same comment letter. Concentrating on the drivers to participate, the data reveal that preparers, accountants and standard setters react significantly more when proposals have a major impact on the accounting numbers of a company. Users, stock exchanges and their supervisory authorities write significantly more comment letters when disclosure issues are at stake. Finally, participating preparers in the IASB's due process are larger and more profitable than non-participating preparers.

Suggested Citation

  • Ann Jorissen & Nadine Lybaert & Raf Orens & Leo Van Der Tas, 2012. "Formal Participation in the IASB's Due Process of Standard Setting: A Multi-issue/Multi-period Analysis," European Accounting Review, Taylor & Francis Journals, vol. 21(4), pages 693-729, December.
  • Handle: RePEc:taf:euract:v:21:y:2012:i:4:p:693-729
    DOI: 10.1080/09638180.2010.522775
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    1. repec:eee:advacc:v:39:y:2017:i:c:p:1-20 is not listed on IDEAS
    2. repec:eee:crpeac:v:25:y:2014:i:8:p:709-723 is not listed on IDEAS
    3. Mariana Valášková, 2014. "IFRS Due Process as an Inspiration for Legislative Process of Developing the Czech Accounting Legislation," Český finanční a účetní časopis, University of Economics, Prague, vol. 2014(4), pages 106-119.
    4. Raffaele Fiume, 2013. "Dialogue with standard setters," FINANCIAL REPORTING, FrancoAngeli Editore, vol. 2013(1), pages 169-173.
    5. Raffaele Fiume & Tiziano Onesti & Valerio Pieri, 2013. "Dialogue with standard setters," FINANCIAL REPORTING, FrancoAngeli Editore, vol. 2013(3-4), pages 169-189.
    6. Erb, Carsten & Pelger, Christoph, 2015. "“Twisting words”? A study of the construction and reconstruction of reliability in financial reporting standard-setting," Accounting, Organizations and Society, Elsevier, vol. 40(C), pages 13-40.
    7. repec:eee:reacre:v:29:y:2017:i:2:p:129-138 is not listed on IDEAS
    8. repec:eee:spacre:v:17:y:2014:i:2:p:143-152 is not listed on IDEAS
    9. Roland Königsgruber & Stefan Palan, 2015. "Earnings management and participation in accounting standard-setting," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 23(1), pages 31-52, March.
    10. David Procházka, 2015. "Lobbying on the IASB Standards: An analysis of the Lobbyists’ Behaviour over Period 2006–2014," Copernican Journal of Finance & Accounting, Uniwersytet Mikolaja Kopernika, vol. 4(2), pages 129-143.

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