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School of Business | Department of Accounting | Accounting | 2016
Thesis number: 14621
Who really decides on accounting standards? Evidence from comment letters on IFRS 13 Fair Value Measurement
Author: Etelämaa, Anniina
Title: Who really decides on accounting standards? Evidence from comment letters on IFRS 13 Fair Value Measurement
Year: 2016  Language: eng
Department: Department of Accounting
Academic subject: Accounting
Index terms: laskentatoimi; accounting; standardit; standards; lobbaus; lobbying
Pages: 73
Key terms: standards; standardit; IFRS; standard-setting; lobbying; lobbaus; lobbaaminen; comment letter; kommenttikirje
This study investigates the standard-setting process of international accounting standards, IFRSs and the lobbying related to the process. The organization setting IFRS standards, IASB, releases a so called exposure draft always before setting up a new standard. The exposure draft is a suggestion for the upcoming standard and includes a list of questions IASB asks an opinion for from the public. The answers are submitted in the form of public comment letters. Along with the final standard, IASB releases a project summary summarizing the most important changes done between the exposure draft and the final standard. In the light of these changes, it is possible to study the lobbying success of the entities that have submitted a comment letter, i.e. the lobbyists. By lobbying success, I mean a situation where a lobbyist has in his comment letter disagreed to some of the questions presented in the exposure draft, and the final standard has been modified according to this lobbyists' opinion. On the other hand, lobbying success can also be found in a situation where some of the exposure draft questions has faced large amount of disagreement, but based on explanations and opinions presented in certain comment letters or by certain lobbyists, IASB has ended up not to change the original exposure draft.

The aim for this study is to analyze what type of comment letters and lobbyists sending them have managed to gain power on the final form of the standard and which characteristics are common for these comment letters. This paper studies lobbying based on the standard-setting process of IFRS 13 Fair Value Measurement and compares the result with other studies done based on other standards. The final sample consisted of 156 comment letters received for the first exposure draft of IFRS 13. The comment letters are public and the data was collected from IASB's public webpage. The research questions were studied qualitatively by analyzing the comment letters as they were lettered interviews. I aimed to identify certain topics and patterns recurring throughout the sample and analyzed the lobbying strategies and characteristics leading to lobbying success in each od the topic identified.

The results support earlier research on factors relating to lobbying success, such as the importance of information quality and credibility as well as the credibility of the lobbyist itself. Based on the analysis I was however not able to identify a certain lobbyist group having repetitive success on the standard-setting process, even though certain organizations such as auditing firms, banks and other standard-setters seemed to have better than average possibilities to affect the form of the final standard. Overall, the key for lobbying success seems to be linked to the topic in question, since it defines which organization is able to provide the most qualified and credible information.
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