European Financial Reporting Advisory Group Research Articles

Using legitimacy strategies to secure organisational survival over time: the case of EFRAG

In this paper, we study how the European Financial Reporting Advisory Group (EFRAG) used different legitimacy strategies between 2004 and 2021 to secure its organisational survival. Although EFRAG is now an established player within the regulatory space of corporate reporting, the organisation’s path towards this position was not straightforward. Based on 20 interviews with current and former members of EFRAG and archival documents, we investigate how EFRAG initially gained and maintained its legitimacy and how it responded to a legitimacy crisis arising in the aftermath of the 2008–2009 financial crisis. Based on prior research on organisational strategies for legitimising actions, we derive a framework for our analysis and show how EFRAG has adapted various legitimacy strategies over time. We further find that the use of legitimacy strategies is constrained by various systemic factors and show how EFRAG’s adaptations to its legitimacy strategies led to new tensions. Our findings contribute to the literature on private regulatory organisations’ legitimacy and the political economy of standard setting.

Integrating sustainability factors into corporate financial reporting in the modern ESG agenda context. Part 1

Subject. This article discusses innovations and trends in the development of corporate reporting standardization within the framework of the IFRS Foundation project and the initiative of the European Financial Reporting Advisory Group. Objectives. The article aims to reveal the essence of the main innovations and characterize the prospects for improving corporate financial reporting in the context of the development of ESG Standards by the International Sustainability Standards Board of the IFRS Foundation and the Task Force of the European Sustainability Reporting Standards Project. Methods. For the study, I used analysis and synthesis, comparison, and generalization. Results. Based on an analysis of the ESG agenda modern realities, the article identifies prerequisites and trends in the development of corporate reporting standardization in relation to the integration of sustainable development factors into financial reporting, and determines the impact of innovations of the two systems of sustainability reporting standards being developed on the informative and analytical value of corporate reporting. Conclusions and Relevance. The need to overcome the limitations and shortcomings of the GRI standards predetermined the development of two new systems of standards in the context of the ESG agenda modern realities. The International Sustainability Standards Board of the IFRS Foundation is developing standards designed to become a global framework for the disclosure of information on sustainable development, focused on the needs of investors and financial markets. The European Financial Reporting Advisory Group is developing European Sustainability Reporting Standards, which should cover a wide range of topics to meet the information needs of various stakeholders. New systems of ESG reporting standards are aimed at generating complete, coherent, comparable and verifiable information in the field of sustainable development. The research results obtained will contribute to the further promotion of sustainability reporting, improve corporate financial reporting practices by incorporating the impact of sustainability issues on value creation, and enhance stakeholder awareness and decision-making in a comprehensive and ESG-informed manner.

Analysis of double materiality in early adopters. Are companies walking the talk?

PurposeThis study aims to analyse the consistency between what companies say (talk) and what they do (walk) regarding the application of double materiality in their sustainability reports.Design/methodology/approachSustainability reports of 76 European companies that reported the application of double materiality and are listed in the Dow Jones Sustainability Index were studied through content analysis.FindingsIn total, 67% of the companies studied claim to apply double materiality but do not comply with the guidelines in this respect proposed by the European Financial Reporting Advisory Group. Therefore, these companies should be considered label adopters.Practical implicationsThis study presents evidence of the existence of label adopters when double materiality is adopted at an early stage, meaning that regulators should seek to control compliance with the minimum requirements established for double materiality. This finding also has implications for assurers, who should consider the degree of real compliance with double materiality requirements when expressing their opinion.Social implicationsThe existence of label adopters in the application of double materiality endangers the sustainable development pursued through agreements such as the Green Deal and through the Sustainable Finance policy proposed in Europe.Originality/valueThis work contributes to the emerging literature on double materiality. Unlike previous works, empirical evidence is provided on the changes that companies present in their material issues with the application of double materiality. Moreover, it confirms the existence of label adopters in the application of double materiality.

Choice of Participation Method in Setting International Accounting Standards: Evidence from EFRAG as an Intermediary for Indirect Participation

Synopsis The research problem Prior empirical research on constituents’ participation in setting international accounting standards has focused on their decision whether or not to participate directly in the standard setter’s due process. However, because that focus neglects constituents’ choice between direct participation and indirect participation via an intermediary, we investigated the determinants of using an indirect method of participation as a substitute for, or in complement to, direct participation. Institutional setting We exploited the European institutional setting, where the European Financial Reporting Advisory Group (EFRAG) serves as an intermediary for indirect participation in the due process of the International Accounting Standards Board (IASB). The test hypotheses Based on rational choice theory, we hypothesized that constituents from EFRAG’s inner circle and from countries with smaller capital markets, lower English-language proficiency, and/or an accounting value profile more different from that embodied in International Financial Reporting Standards (IFRS) have a higher probability of choosing to use indirect participation. Adopted methodology Using a sample of 7,766 comment letters (CLs) from 2005–2017, we focused on individual constituents and traced their use of indirect participation (i.e., sending CLs to EFRAG) versus direct participation (i.e., sending CLs to the IASB). We employed logistic regression models using the methods of participation as dependent variable to test our hypotheses. Controlling for factors used in prior research on direct participation, we estimated a primary model for the full sample of constituents and a secondary model with firm-specific variables for the subsample of constituents classified as corporate preparers. Findings and implications We found strong evidence that the constituents’ membership in EFRAG’s inner circle is positively related, and capital market size in the constituents’ home countries is negatively related, to choosing to use indirect participation. Country-level English-language proficiency and differences in the accounting value profile in relation to IFRS also determine the choice of participation method. Our findings suggest that a preference for indirect participation relates to the barriers to using direct participation. We provide initial evidence of a neglected aspect of Sutton’ s ( 1984 ) rational choice model and implications for EFRAG’s role as an intermediary.

Non-Fungible Token valuation: State of the art and future insight

Purpose: This paper aims to provide an exploratory analysis of Non-Fungible Tokens (NFTs) valuation. NFTs are a new kind of digital asset born out of the dis-ruptive technologies' introduction (i.e., blockchain). A lot of small and medium en-terprises (SMEs), as innovative start-ups, are involved in this domain. Nowadays, several issues in the evaluation field remain unclear. To fill this gap, this research adopts a holistic approach is crucial to draw a clear picture of the first-time ac-counting treatment of these new digital assets. Design/methodology/approach: Using a structured approach, this research considers some of the state-of-the-art international practices and reviews some major scholars' opinions on the matter. Particularly, the study analyses the main contributions provided by international entities (e.g., European Financial Reporting Advisory Group - EFRAG, Chartered Business Valuators institute - CBV, PriceWa-terhouseCoopers - PWC), digital operators, and academia. Findings: Based on the two main strands defined for the NFT's nature, NFTs valuation issues can be resumed in twofold. The first one that considers NFTs as intangible assets suggests following the traditional valuation approaches (cost, in-come, or market) that is already a part of international accounting standards. The second strand that considers NFTs as financial assets proposes a different valua-tion approach based on quantitative methods coming mainly from finance fun-damentals. Originality/value: The originality of this study includes the different NFT val-uation approaches, which enrich the literature and can help SMEs in managing and accounting for this new kind of digital asset.

Some Thoughts on the New EU-Directive on Corporate Sustainability Reporting

Sustainability is on everyone´s lips. It is also increasingly influencing Union legislation. Recently, the Corporate Sustainability Reporting Directive came into force. The Directive also contains requirements regarding sustainability reporting on social issues. These are concretised by the specific disclosure requirements developed by the European Financial Reporting Advisory Group (EFRAG). This article takes a critical look at the Directive and in particular its content with regard to labour law issues, but also at the role of EFRAG in substantiating the reporting obligations of companies.

Cryptoassets: Definitions and accounting treatment under the current International Financial Reporting Standards framework

AbstractThis paper provides a first comprehensive definition of cryptoassets for accounting purposes in the types of payment tokens, electronic money (e‐money) tokens, utility tokens and security tokens. The delivery of definitions for accounting purposes addresses some of the concerns raised by the European Financial Reporting Advisory Group (EFRAG) discussion paper and helps accounting regulators adapt current International Financial Reporting Standards (IFRS) standards to blockchain‐based tokens' taxonomy and nature. The paper helps policymakers reconcile Markets in Cryptoassets Regulation Proposal's (MiCA) definitions and classification of cryptoassets with the EFRAG's specific needs for clarification and/or amendment in the IFRS standards and contributes to providing an accounting guide for practitioners in their financial disclosure.

Climate change, financial risks and reporting: distant horizons?

The notes to financial statements and, in the case of credit institutions, Pillar 3 reports complete and supplement information contained in the balance sheet and income statement. This helps to provide a better estimate of the amount and timing of expected cash flows, and of the associated risks. The climate change challenge introduces new factors that affect the materialisation of those risks, and standards are being developed, from different vantage points and by various organisations, aiming to specify the type of public information –in addition to the notes to financial statements and Pillar 3 reports –that could provide a better picture of these factors. This article presents an overview of the initiatives under way to address the disclosure of climate-related financial risks, focusing on the main international work streams promoted by the International Financial Reporting Standards Foundation, the European Financial Reporting Advisory Group and the US Securities and Exchange Commission. It sets out the context and rationale behind the proposals, their current status and their main content. It also discusses the mechanisms being considered to make the initiatives interoperable and to link this type of information with that provided in the financial statements, in order to prevent fragmentation that could affect financial stability.

Flattening or addressing complexity? The future role of GRI in light of the sustainability accounting (r)evolution

PurposeThis paper discusses the evolution of sustainability reporting and the role of the Global Reporting Initiative (GRI) in relation to the social and environmental accounting (SEA) literature calling for a revolution in the standardization of sustainability reporting and the inherent complexities. This paper focuses on the future role of GRI in light of the changes resulting from harmonization supported by the International Sustainability Standards Board and the European Financial Reporting Advisory Group’s draft European Sustainability Reporting Directive.Design/methodology/approachBuilding on Bourdieu (1983, 1992) and SEA studies, the authors adopt a critical and qualitative approach to theorize power dynamics in the sustainability reporting field. After identifying the main issues arising from the complexity of the sustainability reporting standards and practices according to SEA scholars, the authors connect them with Bourdieu’s (1992, 1983) field theory to discuss the future role of GRI.FindingsThe findings suggest two distinct but intertwined roles that GRI could play in the future, namely, power related and theoretical/technical, aimed at engendering revolutionary rather than evolutionary changes in sustainability reporting.Practical implicationsThis study offers practical implications for GRI to strengthen its future role in sustainability reporting standardization.Social implicationsThe limited time available to mitigate the disastrous consequences of non-sustainable business on society and the environment calls for urgently addressing the complexities of sustainability accounting to foster a positive impact on society and the environment.Originality/valueThe authors’ reflections reclaim the SEA literature as central to identifying sustainability complexity and Bourdieu’s (1983, 1992) notions of power as key to understanding the role of GRI in the sustainability field. Furthermore, this paper emphasizes the intersection of different critical concepts, including power, complexity, value, capital and materiality.

Sustainability Reporting Ecosystem: A Once-in-a-Lifetime Overhaul during the COVID-19 Pandemic

The preparation of sustainability reports, which a negligible number of organisations had been doing until recently, will soon be the new reality for many more organisations. This research aims to present changes during the COVID-19 pandemic in the ecosystem of sustainability reporting pronouncements, especially those used by organisations. In our research, we compare important information about two different periods and the content demands in reporting on sustainability. Changes in the ecosystem are fundamental and unique. Based on the analysis of events and documents, the current research shows the changes in the ecosystem and the future dynamics in the ecosystem, including the principle standard setters (i.e., International Sustainability Standards Board and European Financial Reporting Advisory Group, EFRAG). The research shows that although the changes occurred during the COVID-19 pandemic, they did not significantly impact the ecosystem’s development or slow down or stop their development. The COVID-19 pandemic did not affect the speed or dynamics of changes. In the last few years, EFRAG and the European Union established their position and gained a significant influence in sustainability reporting, with EFRAG at the forefront. The European Sustainability Reporting Standards will be mandatory for organisations doing business in the European Union. At the same time, we do not expect that the IFRS Sustainability Disclosure Standards will be directly endorsed for use in the European Union. The paper presents a new perspective on examining sustainability via developing organisations’ reporting demands within the framework of the uncertain environment caused by COVID-19. In this context, our research also contributes to the literature. The study also has a potential practical impact on organisations and management since it illuminates a wide range of selected sustainability viewpoints and their reporting.

Multi-level benchmark system for sustainability reporting: EU experience for Ukraine

The paper analyzes the key European benchmarks in the field of compiling and submitting sustainability reports. The analysis concerns the disclosure of their features in the context of considering the introduction in Ukraine to increase transparency, accountability and investment attractiveness of Ukrainian enterprises. Based on content and comparative analyses, a comparison was made of the key provisions of sustainability reporting issued by various standards-setters (ISSB (International Sustainability Standards Board), EFRAG (European Financial Reporting Advisory Group), SEC (The United States Securities and Exchange Commission), GRI (Global Reporting Initiative), and IIRC (International Integrated Reporting Council)) as a methodological level of the system of such benchmarks. The global impact of the specified benchmarks is complemented by an analysis of the impact of Directive 2014/95/EU (Non-Financial Reporting Directive – NFRD) and the new Directive 2022/2464/EU (Corporate Sustainability Reporting Directive – CSRD) on the introduction of the sustainability reporting. It is proved that in the context of the formation of the Ukrainian accounting system on the way to European integration, the transposition of the requirements of these Directives is the first step towards streamlining the regulatory framework for companies’ sustainability reporting. A two-level sustainability reporting benchmark system is presented, which at the operational level is based on the EU directives on disclosure of non-financial information and sustainability reporting, and at the methodological level – on the European Sustainability Reporting Standards and other generally accepted standards. Acknowledgment Inna Makarenko gratefully acknowledges support from the Supreme Council of Ukraine (0122U201796).

Influence and behaviour of the new standard setters in the sustainability reporting arena: implications for the Global Reporting Initiative’s current position

PurposeThis study aims to examine the influence and behaviour of the European Financial Reporting Advisory Group (EFRAG)/European Commission, and the International Financial Reporting Standards (IFRS) Foundation/International Sustainability Standards Board in the standardisation of sustainability reporting arena and their implications for the Global Reporting Initiative’s (GRI) current position.Design/methodology/approachThis paper draws on the arena concept, particularly the work of Renn (1992) and Georgakopoulous and Thomson (2008), to explore the EFRAG and the IFRS Foundation’s behaviour towards the standardisation of the sustainability reporting arena and their implications for the GRI’s current position. Further, the documents and public releases pertinent to the activities and output of the GRI, the EFRAG/European Commission and the IFRS Foundation are used. The documents are screened and analysed based on the key elements of arena concept that emerged, which includes “agenda, claims, network of bodies and group engaged, interaction and behaviour with arena issues (audience, materiality, scope and core priorities, purpose of reporting and relevance to sustainable development)”.FindingsThis study reveals the source of motivation and influence of the new standard setters in the sustainability reporting arena and documents the relevance of their behaviour as an actionable strategy to change the arena rule. Particularly, this paper demonstrates the perceived fall away from driving business behaviour towards the pursuit of sustainable development if the GRI and its standards cease to exist.Practical implicationsThe pathway to achieve sustainable development and improve sustainability impact disclosure remains a debatable issue among policymakers and users of sustainability reporting standards. This study reconstructs the awareness of different dynamics at play inhibiting the harmonisation of sustainability reporting standardisation and the importance of the GRI in pursuing global sustainable development.Social implicationsThe pattern of behaviour and agenda of sustainability institutions and influential standard setters harnessed in this paper are aimed at enabling the existence of the rules that can uphold the primary focus of the sustainability reporting arena, particularly in achieving global sustainable development.Originality/valueThis paper furthers the understanding of the importance of the GRI in upholding the key tenets and traditional agenda of sustainability reporting and sustainable development.

From the Chair

On September 10, 2022, in Tampa, Florida, the Business Valuation Committee convened during the 85th International Appraisers Conference. We thank our business valuation conference planning committee members, cochairs Laurie-Leigh White, ASA, and Ken Pia, ASA, and Todd Larson, ASA, Jeff Tarbell, ASA, and Ronald Seigneur, ASA. The conference was well attended and held both in person and via video formats. It was great to come back together again and see so many familiar faces and make new acquaintances. Conference speakers included Roger Grabowski, FASA, Ron Seigneur, ASA, Chris Rosenthal, ASA, Chris Mercer, FASA, Michael Gregory, ASA, and Jay Fishman, FASA. Additionally, Roger received ASA's new Shannon Pratt Award, which recognizes business valuation members with notable contributions to the appraisal community. Make sure you save the date for the next International Appraisers Conference to be held in New Orleans, October 1 to 3, 2023.The BVC welcomed new committee members Dan Daitchman, ASA, and Brian Crotty, ASA. Dan hails from Chicago and is a managing director at B. Riley Advisory Services. Brian is a director at HDH Advisors, LLC, in Des Moines.At our BV Committee meeting, we discussed appraisal standards, ESG-IA, and education, among other topics. Richard Wise, ASA, standards committee chair, stated the 2021 USPAP will be in effect until December 31, 2022, and the subcommittee will be looking into standards as they relate to ligation assignments and possible conflicts, particularly at the federal level. Also appraisal standards, in general, are being considered in light of the impact of ESG (environmental, social, and governance) factors and the valuation of an enterprise.Adam Smith, ASA, is looking to put together an ESG-IA subcommittee. He participates in an international working group that examines financial standards as they relate to ESG-IA, board of directors, regulators, and stakeholders. The ESG-IA working group references standards of the European Financial Reporting Advisory Group (EFRAG), the Task Force on Climate-Related Financial Disclosures (TCFD), the International Sustainability Standards Board (ISSB), and the Global Reporting Initiative (GRI). The international ESG-IA working group is collaborating on a white paper that will discuss the metrics and quantitative disclosures that can impact enterprise value.In education subcommittee news, Bill Johnston, ASA, discussed new upcoming one-day courses that are being planned and our first ever ESOP Virtual Conference held June 21. The conference was well attended with timely topics, including discussion of the landmark Bowers case, the increase in class action lawsuits by private plaintiffs, and the do-away of control premiums by trustees. Liza Bowersox, our webinars education chair, discussed increasing the number of one-hour webinars to add to our collection of two-hour webinars and to suggest that conference speakers also do an extension of their topic into a webinar.Since releasing the sixth edition of Valuing a Business (VAB6), the ASA has made the text available online in electronic format. Additionally, our POV education courses are being revised to coincide with the layout of VAB6, which is now overseen by the ASA as Dr. Shannon Pratt's legacy to the business valuation community. We are already in talks to update the sixth edition, possibly as early as 2023, as well as work on another text originally authored by Dr. Pratt.The BVC will now have meetings quarterly, all being via teleconference with the one in-person meeting taking place at the annual conference. You are welcome to guest at any of these meetings, and I also highly encourage you to volunteer for subcommittees or even seek a position as a BVC member. Ultimately, the ASA needs our members to support its sustainability and future.

A commentary on the “new” institutional actors in sustainability reporting standard-setting: a European perspective

PurposeThe purpose of this paper is to discuss the progress and future prospects of two relatively “new” institutions in this field: the European Commission (EC), together with the European Financial Reporting Advisory Group (EFRAG), and the International Financial Reporting Standards (IFRS) Foundation.Design/methodology/approachThis paper reflexively analyses the recent events that characterise the European Union (EU) regulatory standard-setting landscape in the sustainability field. It is mainly based on publicly available documents.FindingsAfter analysing the different routes followed to enter the field, this paper shows how the EC/EFRAG takes a wider view than the IFRS Foundation on certain key reporting aspects, that is, target audience, materiality and reporting boundary. As for the reporting scope, although it seems that the IFRS Foundation has a more restrictive vision, it is working to broaden it.Practical implicationsThis paper provides some ideas about the potential cooperation between the two institutions. This paper also highlights some potential problems stemming not only from their intrinsic characteristics but also from the routes they have taken to enter the field.Social implicationsBy envisioning how the EU sustainability reporting standard-setting landscape might evolve, this paper sheds light on how companies might need to approach sustainability reporting to adapt to the new institutional demands. Suggestions for collaboration between the two institutions could help them reach common ground and, thus, prevent misunderstandings for companies and stakeholders.Originality/valueThe reflections and takeaways benefit from the authors’ first-hand information, as both are involved in the EU process. The authors could, therefore, feed into further discussions on the developments and challenges facing the EU in this domain.

Harmonization of Sustainability Reporting Regulation: Analysis of a Contested Arena

This paper presents the case for the sustainability reporting field as a contested arena and examines the behavior and the influence of the various actors, such as the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), the International Integrated Reporting Council (IIRC), and the European Commission, including the European Financial Reporting Advisory Group (EFRAG) and the International Financial Reporting Standards (IFRS) Foundation in influencing the shape of the regulation in the arena. Drawing on the arena concept and documentary analysis, this study explores the dynamic in which each actor is attempting to change the rules within the arena and how this contributes to the harmonization and future direction of sustainability reporting. The findings of this study show that the actions and behavior of the various actors are premeditated and strategically calculated to maintain their influence, relevance, and defend their technical authority in the arena. The findings also suggest that sustainability reporting regulation is still far away from harmonization due to the perceived hegemony in the arena, and diversity in the overarching objective of the various actors and the inability of each actor to renounce its particular perspective and orientation. Insights are provided for policy makers on the urgent need to decide and reclassify the specific rules required in upholding the sustainability reporting arena.

Lobbying the IASB: The Role of EFRAG

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.

Is the balance sheet method of deferred tax informative?

Purpose This study aims to compare the value relevance of the recognised deferred tax elements under International Accounting Standard 12 (IAS 12): Income Taxes (balance sheet method) relative to the taxes payable (flow through) method. It also investigates the value relevance of the IAS 12 deferred tax disclosures. Design/methodology/approach This study used standard valuation models to examine the association between share price and the recognised amounts and footnote disclosures of IAS 12. The Vuong (1989) test is then used to assess which information set is more value relevant. The sample includes 440 firm years over the period 2008-2012. Findings The results show that deferred tax amounts recognised under the balance sheet method provide no more information to investors than the taxes payable method (TPM). Deferred tax footnote disclosures, however, are more relevant than the amounts recognised under the balance sheet method. This study investigates potential reasons for the relevance of footnote disclosures. Research limitations/implications This study has not addressed whether the deferral method of deferred tax is relevant. In addition, while footnote disclosures look promising, further research is necessary. Practical implications The results suggest, given the complexity and cost of compliance with IAS 12, that the International Accounting Standards Board (IASB) should undertake a comprehensive re-think on the relevance of the balance sheet method in IAS 12 and revert to the TPM. Originality/value The IASB and the European Financial Reporting Advisory Group have expressed concerns over the balance sheet method under IAS 12. The IASB and the Financial Accounting Standards Board also have concerns over the cost and complexity of the deferred tax disclosures. The study’s results offer a perspective by examining whether the balance sheet method is value relevant. Prior research has addressed this issue using local data (i.e. pre-International Financial Reporting Standards). This study also provides suggestions for future research into deferred tax footnote disclosures.

Formal Participation in the EFRAG’s Consultation Processes: The Role of European National Standard-Setters

While the European Financial Reporting Advisory Group (EFRAG) considers European national standard-setters (NSSs) as close partners that play a vital role in its legitimacy, empirical evidence on EFRAG’s consultation processes and the involvement of NSSs therein remains scarce. We use a multi-issue/multi-period approach to investigate the formal participation in EFRAG’s consultation processes. By examining 2,102 comment letters submitted to EFRAG in the 2002–2015 period, we find that NSSs typically outweigh other stakeholder groups in terms of level of participation across stages of the consultation process and project topics. Although NSSs’ level of participation is rather stable over time, it significantly varies across European countries. We also provide a recent classification of European NSSs and show that NSSs’ level of participation varies by their institutional status and is the highest for private NSSs. Our findings have implications for aspects of the legitimacy of both EFRAG and NSSs and shed light on the role of intermediaries in international accounting standard-setting.

The European IFRS Endorsement Process – in Search of a Single Voice

We analyse the creation and development of the European Financial Reporting Advisory Group (EFRAG), a key part of the EU endorsement mechanism for International Financial Reporting Standards (IFRS), which was probably the first example of a dedicated IFRS endorsement system. We discuss the historical background to the EU approach and we analyse how EFRAG evolved over its early years up to the Maystadt reform. Our analysis addresses its remit, its operational structure and financing and the key decisions made in the endorsement process over this period. We find that while national standard-setters had a limited role in the early stages, and EFRAG had limited resources, over time the pressure to find more resources and to try to achieve a unified voice in the creating of international standards have resulted in national standard-setters playing an ever-greater role. Nonetheless, a single voice for Europe is not likely to be attained

‘Different approaches to regulating private company financial reporting’: a practitioner’s view

I represent an organisation, European Financial Reporting Advisory Group, which does not really deal with regulation for private entities, but reading the paper I noticed a lot of things that are p...