Standard-setting Activities Research Articles

The Ethical Mandate of unesco

Complying with the statutory mission of promoting collaboration in science the United Nations Educational, Scientific and Cultural Organization (unesco) perceives an ethical mandate which commenced in the 1970s and has been object of ongoing establishment regarding its integration into the human rights framework and its institutionalization ever since. The main achievements within this mandate are so far unesco’s standard-setting activities, among which the most important are three universal declarations, and its field work based on different ethical projects which aim at expanding capacities, coordination and the international cooperation within bioethics. As for the ethical achievements in 2014, these are basically rooted in the Medium-term Strategy 2014–2021 and manifested in the working program of International Bioethics Committee (ibc) for 2014–2015. They were discussed in and already partly realized through the Joint Session of the ibc and the Intergovernmental Bioethics Committee and the meetings of the 21st Session of the ibc. Together with unesco’s field work in 2014, the progress is important regarding the role of ethics within the human rights framework; the cooperation between unesco’s bioethical committees; the involvement of organizations in the work of unesco; and its future standard-setting activities.

Equity and Liabilities – A Discussion of IAS 32 and a Critique of the Classification

It is a traditional convention in accounting to distinguish between two classes of claims, liabilities and equity. The International Accounting Standards Board and the Financial Accounting Standards Board have been using a dichotomous classification approach, adhering to this convention. However, over the recent years, this approach has been put under stress. First, there is an ever-growing variety of hybrid financial instruments, some of which designed to exploit this classification approach (accounting arbitrage). Second, the adoption of IFRS in Europe and elsewhere has brought scenarios to light in which the classification approach does not result in decision-useful information. These issues arise when IFRS are applied by entities in legal forms other than a private or public limited company. This essay discusses IAS 32 in the light of the historic origins of the dichotomous classification approach, the recent standard-setting activities and a review of the empirical research. This essay suggests that a reconsideration of the traditional dichotomous classification might be a way forward.

The Value of Disclosing IPR to Open Standard Setting Organizations

In light of the increased demand for interoperability, fragmented ownership of intellectual property and high costs for communicating new technologies, open standard-setting activities emerged as important coordination and diffusion mechanism. Little is known about the value of contributions to standard setting organizations (SSOs) for technology providers. This paper provides a large-scale empirical assessment of the value of disclosures to SSOs for technology sponsors. Our findings show that disclosures referring explicitly to patents are evaluated positively by the market while this is not the case for blanket disclosures. This indicates that the expected benefits of participating in SSOs outweigh potential disadvantages from making patented technologies available to the market under SSO licensing conditions. The market does not appreciate disclosures to SSOs if there is uncertainty about the associated technologies.

Equity and Liabilities – A Discussion of IAS 32 and a Critique of the Classification

It is a traditional convention in accounting to distinguish between two classes of claims, liabilities and equity. The International Accounting Standards Board and the Financial Accounting Standards Board have been using a dichotomous classification approach, adhering to this convention. However, over the recent years, this approach has been put under stress. First, there is an ever-growing variety of hybrid financial instruments, some of which designed to exploit this classification approach (accounting arbitrage). Second, the adoption of IFRS in Europe and elsewhere has brought scenarios to light in which the classification approach does not result indecision-useful information. These issues arise when IFRS are applied by entities in legal forms other than a private or public limited company. This essay discusses IAS 32 in the light of the historic origins of the dichotomous classification approach, the recent standard-setting activities and a review of the empirical research. This essay suggests that a reconsideration of the traditional dichotomous classification might be a way forward.

A Standard setter’s framework for selecting between fair value and historical cost measurement attributes: a basis for discussion of “Does fair value accounting for nonfinancial assets pass the market test?”

This paper describes an income-statement-focused framework for selecting between between the fair value and historical cost measurement attributes that differs from the balance-sheet-focused relevance versus reliability tradeoff perspective that is common to most academic research. This income-statement-focused framework is then applied to the Christensen and Nikolaev setting in Rev Account Stud 18(3), (2013) to suggest that most of the study’s findings are not surprising and can be explained by differences in the income-relevance of fair value and historical cost measures for nonfinancial assets rather than issues with the reliability of fair value measurements, which is the perspective taken by the authors. The paper closes by suggesting additional research on the use of fair value and historical cost measures for nonfinancial assets that would be most relevant to current standard-setting activities of the Financial Accounting Standards Board.

Standard Setting Lessons Learned in the South African Context: Implications for International Implementation

Criterion-referenced assessments have become more common around the world, with performance standards being set to differentiate different levels of student performance. However, use of standard setting methods developed in the United States may be complicated by factors related to the political and educational contexts within another country. In this article, experience gained from conducting several standard setting studies in South Africa is shared. The legacy of the apartheid era, in which segregation and discrimination were institutionalized, affects the attitudes of South Africans toward assessment and placing students into performance levels. These issues played out as panelists were asked to make judgments related to students’ likely performance in higher education. Although the instantiation of panelists’ reluctance to label students may be different in South Africa compared to the United States or other countries, lessons can be learned about how the effects of these beliefs and anxieties may be addressed during standard setting activities.

Standard Setting Organizations versus Free Movement of Goods: The <i>Fra.bo</i> Case

By the judgment made in the Fra.bo case the EU Court of Justice (CJ) ruled that, in certain conditions the standard setting and certification activities conducted by a private-law standard setting organizations (SSO) interfere with the principle of free movement of goods. As a result, an undertaking feeling aggrieved by the measures adopted by an SSO may directly enforce the EU Treaty provisions on free movement of goods directly against such body. The article discusses the Fra.bo case, dwelling in particular on the issue whether the CJ relied on the doctrine of vertical or horizontal effects of the EU Treaty provisions and on the practical implications of the judgment for the SSO business.

The Analysis on the Determinants of the Standard-Setting Activity of FASB in the Period of Global Standardization

The Analysis on the Determinants of the Standard-Setting Activity of FASB in the Period of Global Standardization

Public health and food safety in the WHO African region

Contaminated food continues to cause numerous devastating outbreaks in the African Region. In Africa, a large proportion of ready-to-eat foods are sold by the informal sector, especially as street foods. The hygienic aspects of vending operations and the safety of these foods are problematic for food safety regulators. The global food crisis has worsened an already precarious food situation because when food is in short supply people are more concerned about satisfying hunger than the safety of the food. The aetiological agents include various pathogenic bacteria, parasites and viruses. Chemical contaminants are becoming increasingly important. Human factors including: unhygienic practices and deliberate contamination, environmental factors, such as unsafe water, unsafe waste disposal and exposure of food to insects and dust, undercooked food, and prolonged storage of cooked food without refrigeration are the main predisposing factors. WHO’s position is that food safety must be recognised as a public health function and access to safe food as a basic human right. The work of WHO in food safety is in line with its core functions and various global and regional commitments, especially the document entitled “Food Safety and Health: A Strategy for the WHO African Region (AFR/RC57/4) adopted in 2007. WHO has been supporting countries to strengthen food safety systems and partnerships and advocacy; to develop evidence-based food safety policies; strengthen laboratory capacity for foodborne disease surveillance; enhance participation of countries in the standard-setting activities of the Codex Alimentarius Commission; and strengthen food safety education using the WHO Five Keys to Safer Food . The implementation of the Regional Food Safety Strategy adopts a holistic farm-to-fork approach which addresses the entire food control system. Much has been achieved since the adoption of the document Food Safety and health: A Strategy for the WHO African Region, but commitment to food safety still remains low due to competing priorities. In particular, countries are now shifting away from fragmented food control implementation towards multi-agency and coordinated as well as single agency systems. The Codex Trust Fund has facilitated participation and capacity building for Codex work. Although funding for the Food Safety Programme has increased as compared to the levels in 2002, this remains inadequate. WHO will continue to support countries to strengthen food safety systems in line with its core functions and as enshrined in the regional food safety strategy.

Private Standardization and International Trade in Goods: Any WTO Law Implications for Domestic Regulation?

Private-sector standards are the standards developed and adopted by different types of private entities such as industry associations, NGOs, large retailers and commercial companies. Nowadays, these standards are widely applied on a voluntary basis by main market players in developed and some developing countries. If adopted and applied without due regard to the interests of the relevant stakeholders, private-sector standards may became significant barriers to trade and, thus, restrict market access, especially for small-scale and developing country producers. WTO law contains important obligations for WTO Members with respect to regulation of technical barriers to trade, including those created by non-governmental entities. It is not, however, obvious whether and to what extent these obligations may be applicable to private-sector standards. Certainly, WTO law prescribes rights and obligations only applicable to WTO Members, and, therefore, it may not be directly applicable to private standardizing organizations. Instead, WTO Members might have certain obligations imposed by WTO law to discipline private behaviour within their jurisdictions. The present paper mainly discusses three important issues. First, it briefly describes the diverse ‘world’ of private-sector standards. Then, it addresses the implications of WTO law for regulation of private standard-setting and the tools available to WTO Members in their domestic regulation in order to discipline private standard-setting activities. In conclusion, the paper argues that the obligations of WTO Members may extend only to private-sector standards, which receive sufficient level of governmental support or incentives. This conclusion is based not only on the relevant provisions of WTO law, but also on the considerations that the tools available to WTO Members in their national legal orders to regulate private standard-setting activities are quite limited.Presented at the SIEL 3rd Biennial Conference Singapore 2012

Validating the Standard for the National Board Dental Examination Part II

As part of the overall exam validation process, the Joint Commission on National Dental Examinations periodically reviews and validates the pass/fail standard for the National Board Dental Examination (NBDE), Parts I and II. The most recent standard-setting activities for NBDE Part II used the Objective Standard Setting method. This report describes the process used to set the pass/fail standard for the 2009 exam. The failure rate on the NBDE Part II increased from 5.3 percent in 2008 to 13.7 percent in 2009 and then decreased to 10 percent in 2010. This article describes the Objective Standard Setting method and presents the estimated probabilities of classification errors based on the beta binomial mathematical model. The results show that the probability of correct classifications of candidate performance is very high (0.97) and that probabilities of false negative and false positive errors are very small (.03 and <0.001, respectively). The low probability of classification errors supports the conclusion that the pass/fail score on the NBDE Part II is a valid guide for making decisions about candidates for dental licensure.

Evaluating the Impact of Fair Value Accounting on Financial Institutions: Implications for Accounting Standards Setting and Bank Supervision

Recent standard-setting activity related to fair value accounting has injected new life into questions of whether fair value provides information useful for decision-making, and whether there might be unintended consequences on financial stability. This discussion paper provides insight into these questions by performing a holistic evaluation of fair value accounting’s usefulness, the potential impacts it may have on financial institutions and any broader macroeconomic effects. Materials reviewed as part of this analysis include public bank regulatory filings, financial statements, and fair value research. The bank supervisory rating approach referred to as CAMELS is used as an organizing principle for the paper. CAMELS serves as a convenient way to both categorize potential impacts of fair value on financial institutions, as well as provide a bank supervisory perspective alongside the more traditional investor’s views on decision usefulness. ; The overall conclusion based on the evidence presented is that implementing fair value accounting more broadly may not necessarily provide financial statement users with more transparent and useful reporting. Additionally, financial stability may be negatively impacted by fair value accounting due to the interconnectedness of financial institutions, markets and the broader economy. The analysis suggests that the current direction in which accounting standard setters and bank regulators are moving may represent a possible solution to address these concerns. U.S. accounting standard setters have recently proposed that fair value, along with enhanced disclosures, be applied in a more targeted manner. Bank regulators are developing new supervisory tools and approaches which may alleviate some of the potential negative impact of fair value on financial stability. Additional policy implications and areas for future study are suggested.

The European Ombudsman’s Role as a Developer of Norms of Good Administration

European Ombudsman, the principle of good administration, norm development, European Code of Good Administrative Behaviour, ethics. This article analyses and discusses the role of the European Ombudsman (EO) as a developer of norms of good administration. Empirical research conducted by the applicant reveals that the EO is actively creating norms of good administration in his decisions on individual complaints. In this article, the normative view will be advanced that the EO has his own task and responsibility in respect of the review of administrative behaviour, which is different from the task and responsibility of the Court. Administrative bodies do not only have to act lawfully but also in accordance with the principle of good administration. In the author's view, the EO has his own responsibility in autonomously developing the ethical standard of good administration and developing norms of good administration and to review administrative behaviour for compliance with that standard. However, not everybody shares the view that the Ombudsman should do something else than the Court. Moreover, objections have been raised against standard-setting activities by the Ombudsman, questioning his democratic credentials and maturity. If the Ombudsman embraces the new view in respect of his role as a creator of norms of good administration, he would have to adapt his current mode of operation in a number of respects.

The INTERNORM Project

This paper presents a pilot project to reinforce participatory practices in standardization. The INTERNORM project creates an interactive knowledge center based on the sharing of academic skills and experiences accumulated by the civil society, especially consumer associations, environmental associations and trade unions to strengthen the participatory process of standardization. The first objective of the project is action-oriented: INTERNORM provides a common knowledge pool supporting the participation of civil society actors to international standard-setting activities by bringing them together with academic experts in working groups and providing logistic and financial support to their participation in meetings of national and international technical committees. The second objective is analytical: the standardization action provides a research field for a better understanding of the participatory dynamics underpinning international standardization. This paper presents three incentives that explain civil society (non-)involvement in standardization that overcome conventional resource-based hypotheses: an operational incentive related to the use of standards in the selective goods provided by associations to their membership; a thematic incentive provided by the setting of priorities by strategic committees created in some standardization organization; and a rhetorical incentive related to the discursive resource that civil society concerns offers to the different stakeholders.

Contested hybridization of regulation: Failure of the Dutch regulatory system to protect minors from harmful media

The hybridization of regulatory modes and instruments is currently a popular way to improve public regulation. However, it is still unclear whether combinations of hard law and soft law, co-regulation, and legally enforced self-regulation really make regulation more effective. Using the analytical framework of the “really responsive regulation” approach, in this article we explore effectiveness problems in a hybrid regulatory system that tries to protect minors from harmful media. In our analysis of low compliance rates in the context of system failures, we argue that effectiveness problems seem to arise from poorly informed staff members, lack of internal and external controls, low rule enforcement, insufficient overlap between public and private interests, poor social responsibility in the Dutch media sector, deficiencies in the institutional framework, an inconsistent regulatory strategy, and inadequate responses from responsible regulators. Furthermore, based on our case study we argue that institutional dynamics of standard-setting activities can be detrimental to regulatory goal achievement if there is no compensation at the systemic level. Ongoing “regulatory care” through control, corrective responses, and rule enforcement seems to be crucial for a hybrid regulatory system to perform well.

Press Release Disclosure of ‘Pro Forma’ Earnings Metrics by Large German Corporations – Empirical Evidence and Regulatory Recommendations

This paper is set against the background of recent regulatory action and standard-setting activities pertaining to the disclosure of so-called ‘pro forma’ earnings. For a sample of large corporations listed on the Frankfurt stock exchange, I individually analyze quarterly earnings announcements published for the fiscal years 2005 and 2006. Given voiced concern about the potential of pro forma metrics to misrepresent firm performance and thus to potentially mislead investors, research questions pertain to the use, the calculation and the presentation of pro forma earnings, and the impact of recent recommendations issued by European securities commissions. The results indicate that firms make extensive use of so-called ‘EB’ (earnings before) metrics and, more importantly, of pure non-GAAP performance measures, both in terms of frequency and reporting emphasis. The transparency of adjustments to GAAP earnings turns out to be low. Year-to-year analysis suggests that recent recommendations by European securities regulators have had no discernible impact on these disclosure patterns. Taken together, this evidence suggests that regulatory concern may be warranted. At the same time, it points out the need for more research into the determinants and the investor reception of pro forma earnings disclosures in EU jurisdictions.

A Qualitative Investigation of Panelists' Experiences of Standard Setting Using Two Variations of the Bookmark Method

Only a small number of qualitative studies have investigated panelists' experiences during standard-setting activities or the thought processes associated with panelists' actions. This qualitative study involved an examination of the experiences of 11 panelists who participated in a prior, one-day standard-setting meeting in which either the traditional bookmark method or the single-passage bookmark method was used. Data were collected using in-depth focus group interviews. A whole text analysis resulted in three major categories. Many participants found the fundamental task of choosing a specific item as a bookmark to be inherently difficult. Some also deviated from the prescribed bookmark procedure and relied on alternative strategies that were highly resistant to change. Participants' views of item difficulty and correct item order also directly impacted the bookmarking process. Implications of the findings for standard-setting procedures and for further research are also addressed.

“Doing the Heavy Lifting: Health Care Workers Take Back Their Backs”

Health care workers have the highest musculoskeletal disorder prevalence and incidence of any occupational/industry group, and patient handling tasks are so biomechanically demanding that they cannot be made safe through the commonly used, technique-oriented methods such as "back school" training programs. Although there is standard-setting activity for "no-lift" programs in some states, there is still no federal standard. Health care worker unions and nurses' associations have begun to take action through training members in equipment need, use, and acceptance in programs to encourage adoption of no-lifting programs. Acceptance of lifting equipment is increasing due to recognition of the high human and economic costs of MSD, consistent documentation of cost savings from no-lift programs, major improvements in lifting equipment, and shortages of health care staff. An action-oriented training program for health care workers is described that provides knowledge about the 1) Scope of the current problem of back injuries in health care, 2) Costs of injuries, both to workers and to the hospital, 3) Elements of a safe patient-handling program, and 4) Success stories. The program also builds skills through: 1) Hands-on experience with safe lifting equipment, and 2) Assessing organizational and union readiness and planning for action at the workplace.

Monopoly or Competition: Standard Setting in the Private and Public Sector

Financial accounting standards in the U.S. are developed by private standard setting organizations (SSOs) that operate under the oversight of a government agency. The primary accounting SSO (FASB) has been criticized for writing too many standards (standards overload), the complexity of its standards, the processes by which its standards are set, and the absence of a competitive mechanism to help set standards. The present study seeks to assess the validity of these concerns by looking at standard setting processes in the broader economy.The study consists of three parts. In Section 1, we present some historical data on standard setting activity and document standards set by 604 private and 80 government SSOs in the U.S. We find that there is a time trend in favour of greater reliance on private rather than government SSOs. Accounting standard setters are late entrants in the field of setting standards and appear to be relatively slow in developing new standards. However, accounting standards are relatively long and complex, thus possibly justifying complaints of standards overload. In Section 2, we propose a framework for analysis of the types of standards (quality versus co-ordination) and the processes by which standards are set (monopoly versus competition). We present some data on how standards are set by Government SSOs and provide a detailed comparison of the standard setting processes of four competing technology oriented SSOs relative to the FASB. The comparison highlights a number of features where the FASB differs from other SSOs. These include: the use of sanctions, the threshold of agreement required for standards adoption, and standards competition. In Section 3, we provide data on standards competition in the economy. This includes a case study of internet telephony where competing SSOs have fundamentally transformed the telecommunications industry. Implications for accounting standard setting are discussed.

Accounting - Truth, Lies, or 'Bullshit?': A Philosophical Investigation

This paper offers a commentary on Lee's [2006] critique from Searle's [1995, 1998] philosophical, social constructivist perspective of the FASB's recent principles versus rules initiative. Lee argues that standard setters ignore [or are ignorant of] the philosophical issues underpinning this issue and that until they come to grips with this the initiative, their efforts will remain only a cunning plan to legitimate the profession's standard setting activities to the public. This paper, contra Lee, speculates that philosophically the issue goes well beyond a brute reality versus a socially constructed reality. The paper draws on several strands of linguistically oriented philosophy, including Frankfurt's [2005] insightful book, On Bullshit, to analyze the accountant's agency in preparing financial statements. The paper concludes that if economic income and capital do not exist as brute realties independently of their representation, then accountants can be justified in ignoring [or being indifferent towards] the truth or falseness of these accounts. If there is no bottom line, no final truth, existing prior to the accounting for them, then philosophically it makes no sense to accuse the accountant of violating the representational faithfulness conceptual framework axiom. The paper gestures towards the bigger issue of how the global capital market relies on such ungrounded accounting reports.