Lobbying the IASB: The Role of EFRAG

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The international standard-setting process has always been perceived as a political process determined by self-interested parties that aim to influence the outcome of the International Accounting Standards Board (IASB). Although Sutton (1984) noted that the opportunity to influence a regulator’s thinking is more likely to occur at earlier stages and behind the scenes, empirical work examining the lobbying activities that occur before the IASB begins its public consultation process and behind the observable scenes has received little attention to date. Since the European Financial Reporting Advisory Group (EFRAG)’s role is to ensure that the “European Voice in financial reporting” is reflected in the IASB’s decision making (EFRAG, 2018, p. 2), we examine how and when EFRAG acts and interacts with the IASB and how these actions and interactions have the potential to influence the IASB’s decision making. To do so, we conduct interviews with members from both institutions. We find that EFRAG already interacts with the IASB during the agenda consultation and continues its efforts until a standard is endorsed into EU law. We provide new empirical insights into the political process of the IASB’s standard-setting process by revealing how EFRAG uses direct and indirect (both formal and informal) ways during virtually every step of the international standard-setting process to interact with the IASB.