Lobbying behaviour and the development of international accounting standards

The case of the Iasc's joint venture project

Bibliographic Data

ID19447334
AuthorsSara York Kenny (University of Utah), Robert K Larson (0000-0003-3649-2847, Pennsylvania State University)
Year1993
Volume2
Issue3
Pages531-554
Publication date1993-12-01
Peer ReviewedYes
Open AccessNo
TypeARTICLE
VenueEuropean Accounting Review (JOURNAL)
Journal identifiersISSN: 0963-8180 • E-ISSN: 1468-4497
PublisherInforma UK Limited (PUBLISHER • GB)
DOI10.1080/09638189300000050
OpenAlexW2113789463
LanguageEN
Citations received2
References cited26

This paper studies the role of lobbying in an international (i.e., harmonization) accounting standards setting and examines the IASC's process of promulgating International Accounting Standard (IAS) 31, ‘Financial Reporting of Interests in Joint Ventures'. Our study begins with an examination of the Exposure Draft (ED 35, ‘Financial Reporting of Interests in Joint Ventures') preceding IAS 31 and analyses the lobbying efforts observed during the promulgation process. Consistent with prior literature, the paper analyses lobbyists and their lobbying positions. During the time frame of the study (1989 and 1990), the IASC changed its due process, which affords us the opportunity also to analyse the IASC's strategic approach to public input. Accordingly, this study incorporates aspects of institutional theory as it relates to strategic choice by organizations. The comment letters received by the IASC regarding ED 35 were analysed using a form of content analysis. The analyses generally support the hypothesized relationships; namely, lobbying firms tend to be very large, and they lobby against any change in the status quo; professional and trade organizations lobby on behalf of their constituents and tend to support the majority positions held by those constituents; and the regulatory body (IASC) seeks acceptance from its constituency by adapting its position to that which is more palatable to the lobbyists. The interaction between respondents and the IASC is consistent with an institutional theory explanation of organizational change and adaptation to environment pressures. Few individual firms lobbied the IASC Rather, the bulk of the respondents to ED 35 were professional associations and organizations. The result contrasts markedly with both our expectations and prior research involving lobbying of the FASB. The dearth of corporate respondents to ED 35 implies that multinational corporations do not yet see the IASC as a serious regulatory organization. Further, few legal, governmental or regulatory organizations required compliance with IASs during 1989 and 1990, when IAS 31 was being deliberated

Accounting information system · Business · Economics · Financial accounting · Harmonization · Political science · Promulgation · Public relations · Status quo · Accounting and Organizational Management · Auditing, Earnings Management, Governance · Corporate Finance and Governance · Law · Accounting · Finance

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