The Politics of Accounting Regulation
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The Politics of Accounting Regulation

Organizing Transnational Standard Setting in Financial Reporting

Sebastian Botzem

The global financial crisis underlines the relevance of accounting standards as much more than instrumental rules for corporate reporting. This important book details the accounting standards that embody societal and professional values and contribute to the distribution of financial benefits that put international harmonization of standards into the limelight. Sebastian Botzem reveals that international standards have emerged after decades of contest and political bargaining, which resulted in closely aligned standards, voluntary consultation procedures and a network structure comprising actors mainly stemming from global auditing firms, regulators and international organizations.
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Chapter 6: The Role of Individuals and Organizations in Transnational Standard Setting

Sebastian Botzem

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6. The role of individuals and organizations in transnational standard setting The individual actors and organizations involved in international standard setting have a crucial impact on the process. They participate actively in the IASB’s various bodies in order to influence both standard setting and the development of the IASB’s organizational structure. For the most part, these actors are affiliated either with the preparers of financial statements, with the accounting profession, or with the users of financial statements, such as financial analysts or investors who base investment decisions on those statements. In addition, there are other groups that get involved in the process, for instance by submitting comment letters, issuing position papers, or requesting information. Among them are academics, public agencies, regulatory authorities, national standard setters, and professional associations. In this chapter, I will analyze the influence of individual persons and key organizations on international standard setting. The analysis of the role of individual and collective actors follows the IASB’s organizational design and is divided into two main parts: The first addresses the composition of the Board as the IASB’s main decision-making body while the second is devoted to the organizations participating in the other IASB bodies. The study’s structure thus matches the IASB’s two-tiered structure, as laid down in its constitution, consisting of the Board, on one hand, and the set of complementary oversight, advisory, and interpretations bodies, on the other. The empirical findings confirm the division of labor between the Board as the locus of authority in matters of...

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