Accounting Standards and Lobbying: A Critical Review Report

This report provides a critical review of lobbying within the accounting standard-setting process, focusing on the International Accounting Standards Board (IASB) and its role in developing International Financial Reporting Standards (IFRS). It explores how lobbying activities, including direct communications and political influence, impact the standard-setting process and financial reporting. The analysis covers the economic consequences of accounting standards, the behavior of decision-makers, and the influence of various stakeholders. The report examines the effects of lobbying on the development and implementation of accounting standards, the role of regulatory bodies, and the challenges faced by the IASB. The review also considers the impact of lobbying on financial statements, the harmonization of accounting standards, and the potential for conflicts of interest. The report highlights the role of government and the potential for threats to the standard setters. The report concludes by discussing the critical review of lobbying in accounting standards and the importance of transparency and accountability in the standard-setting process.

Running head: A Critical Review of Lobbying in the Accounting Standard Setting Process
A Critical Review of Lobbying in the Accounting Standard Setting Process
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Author’s Note

1A Critical Review of Lobbying in the Accounting Standard Setting Process
Introduction
Accounting standard are the certain set of rules and regulation that are required to be
followed during performing any accounting process. The International Accounting Standard
board helps in developing the standards along with approving the standards from
International Financial Reporting Standards. The committee for the accounting standard has
the potential for investing the investors of the selected organization, which mainly uses the
conceptual framework for better performances in the financial statements. Economic
consequences is required to be used for describing the impacts on the accounting reports that
are generally provided to the managers after a certain period of time. The behaviour for
decision making includes the directors of the business along with the role of government and
investors and creditors for releasing the pressure on the standard setters.
The standard of accounting containing the objectionable features points out the
overall process of lobbying which might lead the company in the verge of financial loss for
that particular fiscal year. Writing of letters along with giving oral testimony highlights the
public comments that goes beyond the concerned campaigns and proposed proposals for the
company that has sets its standards. Lobbying includes the pressure that mainly includes the
treats along with withdrawing the funds for the standard setters by carrying the deal in form
of the public. It also includes with certain accounting standards by considering the important
factors that points out the performances reporting of the overall standards of accounting. This
mentioned accounting standard board including political lobbying that mainly emerges the
issue of the standard setters. In addition to this, the regulatory body would intervene the strict
compliance that would securely fit into the overall standard of accounting.
Analysis
The International Accounting Standard Board has the essential part known as
lobbying which is also includes the primary part of standard setters. As per Bamber and
McMeeking (2016) the process of standard setting is for the key aspects that mainly plays an
important role in different types of constituencies at the time of practicing lobbying. The
transactions that goes under the regulation of regular base payment before the impact on the
report of standard setters. The regulation that is based on the share payments includes the
transactions, which are regulated before the International Financial Reporting Standards.
Based on the viewpoint of Hoffmann and Zuelch (2014) analysing the overall process of
lobbying in the accounting standards setting process highlights the behaviour and assessing

2A Critical Review of Lobbying in the Accounting Standard Setting Process
the influences the IASB by the decision making process along with addressing the various
factors of accounting standard. The rational choice of model includes the analysis of lobbying
that point out the decision making by IASB in the analysis of the content in the accounting
year. The particular strategy that provides the arguments on the point of disagreement is
constituted with the constituted groups of accountants along with dominance influence in the
interested party (Álvarez, Calvo and Mora 2014). The conceptual framework on IASB acts as
the constraints for gathering the information about changes in the accounting standards.
That cost that is associated with the introduction of the accounting standard points out
the significances of the incremental costs that would be incurred by the stakeholders. This
particular amount of cost is generally incurred during the process of preparation of financial
statement after considering the respective accounting standards. As the costs are non
avoidable so the company is required consider the impact of the standards that sheds light on
the covenants and restrictions on the accounting changes. The journal article that has been
mentioned by Wingard, Bosman and Amisi highlights the assessment of influences on the
due process of standard setting (Wingard, Bosman and Amisi 2016). This particular journal
highlights the expansion of the multinational companies that consist of cross border listing
along with foreign direct investment for harmonising the accounting standards. There are
different types of accounting standards on which the accounting treatment is totally based on
the financial performances of the company. IFRS coincides with the overall establishment of
the regional accounting bodies that acts in the corporate governance of the accenting based
industries (Mohammadrezaei, Mohd-Saleh and Banimahd 2015). The large economies that
includes the IFRS varies different degrees along with endorsement process that has the
corporate features of both endorsement that is political in nature and technical assessment.
The legal of bodies of accounting standards have the overall potential for enhancing
the legitimacy of IFRS, which threatens the effectiveness of development in regional
substitutes that is incorporated in the country itself (Botzem 2014). The study also explores
the financial reporting along with legitimacy, which depends on the factors that affects the
development of the overall process of accounting. The technocratic structure is situated with
IASB which mainly concentrates on the decision making process of standard setting. The
standard setting for IFRS is required to be assessed as per the condition of discourse in
practical nature. Reuter and Messner (2015) has mentioned that the governance structures
includes the process of standard setting and staffing along with funding which helps in
participating during the constituents of financial instrument and measurement of fair value.

3A Critical Review of Lobbying in the Accounting Standard Setting Process
The analysis of the global financial crisis sets the two standards along with controversial
aspects of accounting and financial crisis. Mellado and Parte (2017) has mentioned that the
projects that is required to be initiated mainly focuses on the conceptualisation that is related
to the earnings per share along with the management. The company announces the earnings
per share that helps in forecasting the share by retaining the flexibility of the accounting
standard.
The executives of the company objects the overall standards of setting with the
initiatives for complaining with other factors of accounting, which increase the chance of
lobbying with certain accounting standards (Kosi and Reither 2014). Dealing with the
legislators in terms of accounting issue points out the typical staff that typically includes the
accounting standard instead of accounting treatment. The initiatives that is proposed in nature
records the list of revenues with the standard setters for arguing with the standard of
accounting that is proposed in nature by stabilising the banking system along with restricting
the overall availability of credit. Standard setts might provide threats by the banking
community along with forcing the regulators by the balance of capital of the company
(Crawford et al. 2014). Based on the viewpoint of the article, the proposed standard might
help in regulating the terms and condition of the capital that is regulating in the overall capital
structure of the company. Governments also plays a major role for the standard setters in
lobbying the accounting standards that is implemented by the company executives (Morley
2016). Investment in the capital goods results in such type of decision that might abandons
the plans for the expansion with the investment of funds for the financial instrument.
IASB standard setting process for IFRS
IFRS represents the reporting system that is recognised globally along with
considering the important factors that affects the overall standard setting process. Nurunnabi
(2014) has opined that it is also important for understanding the setting standard along with
the governance for evolving the overall procedure for enhancement. The legitimacy of
accounting standard includes the profitability that might require the obedience from the
rational as well as from the traditional standards of accounting. As per the traditional
authority, the sanction of the accounting standard highlights the negative aspects of lobbying
with the standard setters and includes the overall process (Young 2014). IASB standard sets
the overall process for IFRS as it includes the overall viewpoint of the types of complexities
that are associated with the enacted rules and regulation of the accounting standards. The

4A Critical Review of Lobbying in the Accounting Standard Setting Process
rules that is recorded in IFRS is required to be equated that mainly highlights the policies
along with the powerful forces of interest in the company. It also includes the disclosure of
the financial assets that mainly involves the participation of the accounting standards in the
selected organisations (Teixeira 2014). The board of members of IASB represents all of the
theoretical framework that are required to be surrendered after a certain time period.
The challenges that are required to be faced by the company includes both positive
aspects as well as negative aspects, which might affect the overall nature of business. As per
Himick and Brivot (2018) the delegation of policy making responsibilities are sensitive with
the field that might highlights the setting of standard governance with technical expertise.
The outcome of the responsibilities might not be attracted with certain responsibilities that
would help in highlighting the critical review of lobbying in the accounting standard setters.
The particular process of accounting standard setters highlights the overall governance of the
structures. Lobbying that is political in nature is required to be attempted on the set of
standard of accounting (Lovell 2014). The time of rising the overall rate of inflation mainly
outlines the current purchasing power of accounting method. The indexation of the financial
statement helps in changing the overall price index for the consumer along with exposure of
the draft that becomes required for public accounting firms with certain balances in the
capital accounting. The standard setters of the accounting standards involves in the
supplementary statement in the annual reports of the company in their normal course of
business operation (Pelger 2016). The CPP approach, which is denoted as current purchasing
power generally opposed by the standard setters of accounting.
Critical review of lobbying in accounting standard
Critical review consist of both positive impact as well as the negative impact of
lobbying in the accounting standard that has been set by the standard setters. Based on the
viewpoint of Dobler and Knospe (2016) it includes the harmonisation effect that might
distract the concentration of the effectiveness of different kinds of barriers such as political
barrier, social barrier, cultural barriers and others. The harmonisation effort in the lobbying of
accounting standard analyses the relationship between the accounting standards and overall
harmonisation process. The research has been analysed by the drivers of the companies that
are more into the factors of contribution along with closeness of the debt content (Procházka
2015). The firms of the companies is lobbied in the board relationship along with the
enterprises with higher degree of independence by the standard setters. The determinants of

5A Critical Review of Lobbying in the Accounting Standard Setting Process
lobbying is required to be considered by the significant determinants of the decision against
the overall process of lobbying. The debt covenants generally explains the exact difference
between the lobbying behaviour and non lobbing behaviour (Königsgruber and Palan 2015).
The standard setter highlights the inventive compensation, which are required to be included
in the favour of decision making with actual outcome of the overall process.
The lobbying program is required to be analysed with certain respective association,
which might assist the standard setters along with possible effects of standards of accounting.
It also includes the potential payoffs that is mainly used by multiple channels of political
influence that might affects the overall rules and regulation of the overall process. Müller
(2014) has opined that financial statement is the most vital documents of an organisation as it
includes the financial information that has been recorded throughout the year along with their
transaction, which has taken place in the business. The occasional lobbyers are made by the
income increasing accounting that would help in estimating the total amount of expenses that
would be incurred in upcoming years (Hellmann 2016). Lobbying in the viewpoint of IASB
includes the accounting that is to be set by considering the size of the company, which is
associated with the process of lobbying. Australia, Hong Kong and Switzerland has the
highest percentage of lobbying along with the factor that are directly associated with the
consent by the IASB (Álvarez, Calvo and Mora 2014). It also includes the empirical analysis
of the UK management that are investment in nature along with highlighting the major factor
of considering the overall process of lobbying.
Critical findings that acts as factors for standard setting process
The effects of the lobbying forces in the political background includes the effective
management of the accounting standard that are required to be considered by the accounting
standard setters by the organisation (Nurunnabi 2015). Substantial factors of lobbying has the
positive effect on the financial statement that might mismatch with the empirical valuation of
lobbying. The payoffs that are potential in nature are required to be included with certain
obligation that would help in allocating the resources for the standard setters. Lobbying might
affects the overall standard of accounting, as the overall process of accounting treatment
might get wrong in the financial statement. The factors that affects the overall critical
findings for standard setting process includes the mission of certain comprehensive along
with independent process by encouraging the broad participation (Hodder and Hopkins
2014). In the viewpoint of the stakeholders, this particular subject is required to be viewed by

6A Critical Review of Lobbying in the Accounting Standard Setting Process
over sighting the accounting standard board. It also includes the viewpoint of the general
standard of accounting would be considered by the general board of accounting standard. The
rules of procedures mainly describes the process of activities that would move with the
standard setters by the board of trustees.
The accounting board includes the overall process of activities that are generally open
to public consideration for observing the transparency with the overall process of standard
setting. The mission is required to be accomplished that is directly related to the principles of
accounting along eth considering factors of lobbying by standard setters (Morales and
Sponem 2017). The procedures of operation by IASB and IFRS includes the responsibilities
of the chairperson who is directly related to the core of the organisation by providing both
theoretical knowledge as well as practical knowledge in the process of accounting. Different
types of communication is required to be considered for updating the accounting standard
that also includes the form and content of the drafts that are exposed and concepts of the
statement. The protocol for meeting is required to be included with certain obligation that
includes the effective of lobbying by the standard setters and in their overall process (Botzem
2014). Public announcements that are rules governing might consist of certain types of
information that would be required in the viewpoint of financial information in the statement.
Lobbying in accounting standard setting process works with issue standards that are
expected to flow with certain obligation that would help in the overall course of setting of
standards. The board is mainly responsible for reporting the issue, which are faced by the
stakeholders in the meantime of the situation (Dobler and Knospe 2016). The members of the
boards issue the exposure draft that are required to be analysed in the input of stakeholders.
The governance structure of IFRS is mainly dominated by the G 20 countries along with
IASB that depends on the international accounting firms with financial viability. The due
procedures for the IFRS includes the opportunity that highlights the actual participation of the
constituents of Europe and other countries (Himick and Brivot 2018). The practical
implication on the due process is associated with legal as well as formal performance of tasks
that are reserved with national standard setters.
The analysis of the political and lobbying forces on the accounting standards includes
the application of the clarification with certain forces that has been captured with the different
types of empirical studying of lobbying in accounting standard setting process (Hoffmann
and Zuelch 2014). The analysis for the lobbying behaviour records the response to the

7A Critical Review of Lobbying in the Accounting Standard Setting Process
particular level of lobbying that is required to be considered during the preparation of the
financial statement by the appointed managers of the company. It also highlights the
difference between the recognition as well as the disclosure from the managerial perspective.
Lobbying has been deployed with the understanding with certain material of the statement of
finances along with considering the fakirs that includes the perspective of certain disclosure
of financial information in the financial statement (Kosi and Reither 2014). The topic is
required to be identified along with conducting the pre agenda research along with making
the agenda. The board of public holds the obtaining of the discussion paper with carefully
considering the activities that are due process in nature. The analysis of IASB statement of
accounting along with demonstrating the opportunity of lobbying in the organisation.
Conclusion
From the above mentioned study, it can be concluded that the process of lobbying
includes the procedures that might affect the accounting standard for better implementation
by the standard setters. The financial crisis that are globally overdue includes the legitimacy
of the standard along with the lack of participation that influences the power of stakeholders.
The regulation that is based on the share payments includes the transactions, which are
regulated before the International Financial Reporting Standards. The rational choice of
model includes the analysis of lobbying that point out the decision making by IASB in the
analysis of the content in the accounting year. There are different types of accounting
standards on which the accounting treatment is totally based on the financial performances of
the company. IFRS coincides with the overall establishment of the regional accounting
bodies that acts in the corporate governance of the accenting based industries.
The governance structures includes the process of standard setting and staffing along
with funding which helps in participating during the constituents of financial instrument and
measurement of fair value. The initiatives that is proposed in nature records the list of
revenues with the standard setters for arguing with the standard of accounting that is
proposed in nature by stabilising the banking system along with restricting the overall
availability of credit. The due process is economically based arguments that works between
the stock options as expenses and maintaining the convenient charges that puts impact on the
taxes on the valuation of assets. Lobbying might affects the overall standard of accounting, as
the overall process of accounting treatment might get wrong in the financial statement. This

8A Critical Review of Lobbying in the Accounting Standard Setting Process
might cause the standard setters for modifying the position that helps in diluting the risk by
implicating the principles of standards (Refer to Appendix 1).

9A Critical Review of Lobbying in the Accounting Standard Setting Process
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10A Critical Review of Lobbying in the Accounting Standard Setting Process
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11A Critical Review of Lobbying in the Accounting Standard Setting Process
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12A Critical Review of Lobbying in the Accounting Standard Setting Process
Appendices
Appendix 1
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Introduction 278
Analysis
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Conclusion 293
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