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Influence of transnational economic alliances on the IFRS convergence decision in India—Institutional perspectives

Sarada R. Krishnan

Accounting forum, 2018, vol. 42, issue 4, 309-327

Abstract: This study contributes to the literature on global governance by highlighting the importance of not losing sight of the nation state as an important player in the transnational governance arena. Specifically, literature on global (accounting) regulation devotes a great deal of attention to the roles of organisations and agencies with transnational remit (such as global standard setters, donor agencies) while often downplaying the significant impacts of the more traditional cross- country links forged through economic relationships and resource dependencies between national and transnational institutional fields. This was specially noted in the case of the indirect influences of the US’s decision to delay IFRS convergence. While being interpreted as an indirect source of influence, such a decision played a very significant role on the convergence negotiations in India. The study shows how the US influence was channelled through Japan with which India has significant trade and economic relations and, most importantly, holds a joint forum specifically to discuss convergence issues. The consequences of India’s links with countries such as US and Japan in the decision-making process provide a vivid indication of the important roles of cross-governmental relationships in the global governance arena, and also question the position of transnational organisations as pervasive powers in such governance. The study’s findings clearly demonstrate that the pursuit of full IFRS convergence strongly favoured by the transnational forces was invariably challenged in the Indian context by the influences of powerful nation states advocating a more cautious approach.

Keywords: IFRS convergence; Decision-making; Role of nation states; Institutional fields; Transnational networks; India; Resource dependency (search for similar items in EconPapers)
Date: 2018
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DOI: 10.1016/j.accfor.2018.09.002

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Handle: RePEc:eee:accfor:v:42:y:2018:i:4:p:309-327