MODELLING THE INTERNATIONAL ACCOUNTING STANDARD SETTING PROCESS FOR FINANCIAL INSTRUMENTS
|Speaker:||Prof Margaret Woods, Professor of Accounting and Risk Management, Aston University|
|Date:||Wednesday 28 November 2012|
|Time:||14:00 - 15:30|
|Location:||Building One, Constantine Leventis Teaching Room|
Accounting for financial instruments is widely recognised as a major challenge to financial accounting practice and accounting regulators (for example Young, 1996; Bradbury, 2003; IASC, 1996). The International Accounting Standards Committee began work on developing an accounting framework for financial instruments in 1988 through a joint project with the Canadian Institute of Chartered Accountants. Twenty four years later, the International Accounting Standards Board is still working to achieve its objective of a high quality globally acceptable set of rules on accounting for financial instruments. This extended time frame supports Young’s (2003) description of accounting standard setting being a process without end.
In this paper we develop a flow chart model of the standard setting process which integrates the institutional perspective on standard setting suggested by Young (1996) with the process approaches of Hussein (1981), Walker and Robinson (1993) and Reither (1997) to incorporate influences that may impede regulatory progress. The model uses the development of international accounting regulations for financial instruments to illustrate how the process of accounting standard setting is non-linear and potentially without end. We offer evidence to show that external events, organisational learning, and lobbying can all serve to introduce circularity to the standard-setting process. We also extend existing models of standard setting by demonstrating that regulators can convert apparently single accounting problems into multiple agendas and overlapping projects..