General programme, activity sheet

Thursday 5 September, 2013 16:00 to 16:40 Paper
Strategies employed by the IASB to legitimise their activities: The case of IFRS8
Speaker: Louise Crawford

Authors: Louise Crawford, Christine Helliar, David Power


This research investigates the adoption and introduction of International Financial Reporting Standard 8 – Operating Segments (IFRS 8) from a legitimacy perspective, particularly assessing the strategies that the IASB has adopted for encouraging stakeholders to accept IFRS 8 as a legitimate standard for segmental reporting.. The IASB adopted IFRS 8 in 2006; the new standard attracted interest and controversy during its passage through the IASB consultation and the European Parliament endorsement processes in relation to the management approach adopted for identifying and measuring segmental information to be disclosed in financial statements. We use NVIVO content analysis of the comments letters that were received by the IASB in response to Exposure Draft 8 ‘Operating Segments’, together with evidence from 35 semi-structured interviews, 15 of which were carried out prior to the implementation of IFRS 8 and 20 post-implementation. The research is interpreted using legitimacy theory, refined into its three dimensions: pragmatic; moral; and cognitive. In so doing we explore which audiences have evaluated IFRS 8 reporting practice as legitimate and which strategies have the IASB employed in order to garner support for the standard amongst different audiences. Our research suggests that the IASB employed a conforming and selecting strategy to garner pragmatic legitimacy for the adoption of IFRS 8, primarily from preparers, and is continuing to do so through engagement with such audiences throughout the post-implementation review of the standard. However, as the IASB progresses along the new PIR process, we suggest that the IASB is focusing more strategic effort on meeting the pragmatic and moral needs of audience that were less supportive at the adoption stage and are still vocal in their on-going criticism of the standard. In this turn of events, we argue that the IASB is adopting a strategy of trying to actively manage the perceptions of audiences and encourage them to accept the standard; in other words, there is evidence that they are using a strategy of manipulation. The results should be useful to understanding the behaviour of the IASB in its attempt to converge accounting practice that is acceptable to multiple audiences. The IASB may also be interested in this research as it rolls out its new process for post-implementation reviews to ensure that its international standards meet the needs of financial statement users as purported in the IASB’s conceptual framework.
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Session 2 Room 1.2.


Other activities in Session 2 Room 1.2.
17:20 h. to 18:00 h.Paper

The interplay between conflicting institutions, power relations and market forces in Finnish accounting harmonization

Speaker: Karolina Söderlund, Åbo Akademi University
16:40 h. to 17:20 h.Paper

Corporate participation in the due process of international accounting standard setting: An analysis of the antecedents

Speaker: Ann Jorissen, Professor

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