Does greater user representation lead to more user focused standards? An empirical investigation of IASB’s approach to standard setting

Alnoor Bhimani, David Bond and Prabhu Sivabalan

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: The International Accounting Standards Board (IASB) has faced calls to act in the interest of users of financial statements given the perception of the greater influence exerted by preparers and professional accounting firm stakeholders. In response, the IASB has, over more than a decade, sought to increase user centricity, adapting its people and processes to more fully engage the views of users. We report on our empirical analysis from the standard setter’s perspective of user engagement which is a research objective not documented in the prior literature. Our results draw on interviews conducted with 31 IASB representatives, comprised of 26 staff and 5 Board members representing approximately 60% of IASB’s non-support staff as well as publically available archival data. We deploy the Griffiths (1960) citizenship participation framework in reporting on the procedural rigor directed at user utility, to assess IASB’s attempt to enhance its perceived relevance (existential enhancement) as a standard setting body. We explain how a “clash” between new user centric practices and the extant practices led to challenges for the IASB in factoring the views of, and acting in the interest of users, as demanded by regulatory authorities. We discuss some of the tensions this has made evident in IASB’s objective to function as an effective standard setter. Conceptually, our paper clarifies how more embedded representation modes per Griffith (1960) elicited greater user feedback, but that tensions arose in relation to the IASB’s broader objectives to more directly serve users’ interests. Functionally, we offer a more nuanced appreciation for why the IASB might not unilaterally seek to be “user-focused” in the interests of both users and other stakeholders, and in doing so, serve the longer term objectives of accounting standard setting.

JEL-codes: M40 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2019-03-02
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published in Journal of Accounting and Public Policy, 2, March, 2019, 38(2), pp. 65-88. ISSN: 0278-4254

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