Standard-setting Process Research Articles

Certification with Russian characteristics: Implications for social and environmental equity

This paper applies theories of equity and transnational “governance generating networks” to assess how forest certification is enacted in Russia. Drawing on eight years of field research, we compare the engagement of shifting networks of Russian private sector, NGO, governmental and local community actors in implementing select social and environmental standards and how this impacts the effectiveness of the FSC in tackling local community and environmental concerns.Our case study suggests that much of the parameter-setting for what is addressed in certification's “sites of implementation” happens outside of formal standards-setting processes. In regard to environmental standards, strong and stable transnational environmental networks have been relatively successful in protecting “high conservation value forests”. However equivalent multi-level networks are lacking for key social standards. While a national social NGO has had some success in promoting procedural equity through community participation, we find no evidence that certification was addressing local community concerns for distributive equity. In particular, certification had failed to address the loss of small and medium forest enterprises, loss of local access to sawnwood and rising costs of fuelwood. This highlights the power dynamics of global standards implementation and the need for multi-scale advocacy coalitions to ensure their effective implementation.

ENTREPRENEURIAL TRAFFIC MANAGEMENT AND THE INTERNET ENGINEERING TASK FORCE

The changing role of the Internet Engineering Task Force (IETF) standard setting process, from designing and implementing the best effort transmission control protocol/Internet Protocol (TCP/IP) as a universal standard towards a platform for dealing with the increasing need for variety in the design of a Quality of Service (QoS) differentiated traffic management architecture, is demonstrated. The IETF's contributions to flexible open transmission architecture, able to provide the required traffic qualities for the different applications, constitute the relevant pillars of a Generalized Differentiated Service (DiffServ) architecture. Further, the role of entrepreneurial traffic management within the Generalized DiffServ architecture, and the division of labor between the IETF and entrepreneurial traffic management, is analyzed. Within the “umbrella” architecture of Generalized DiffServ with the potential to combine basic elements of QoS differentiated traffic architectures, a flexible framework for entrepreneurial traffic quality differentiation strategies is evolving. Its basic characteristic is market-driven network neutrality with all applications bearing the opportunity costs of their required traffic capacities. Consequently, an artificial market split between best effort TCP/IP and managed services would conflict with the integrated service approach of the IETF. Finally, the implementation of Generalized DiffServ via Next Generation Networks is considered.

Accounting integration issues of EU member states

The aim of this article is to discuss the dilemmas over the integration of accounting in EU member states. The dilemma could be divided into the following main groups. Dilemma of the user of financial statements. This dilemma consists in determining for whom the integration of accounting in EU is crucial, and who is the intended beneficiary of integration. Dilemma arising from the lack of theoretical framework for drafting directives and standards: the accounting paradigm assuming that accounting is strictly quantitative. Accounting is a social science, whereas the accounting practice has greater influence on social, rather than purely economic, reality. Dilemma over legal regulations and the legitimization of standard setters could be attributed to accounting regulations as legal norms. A classic example of this might be the transition from rule-based to principle-based IFRSs. The dilemma over the legitimization of standard setters has its roots in the legal aspect of accountancy. In order to solve it, it is necessary to answer the question: ‘who controls the processes of accounting integration?’ since the participants of this process often present divergent viewpoints, and sometimes even opposite priorities. Dilemma over the politicization of accountancy. The more globalized and complex the economic environment is, the more of political intervention there is expected to be in the standard setting process, affected by global geopolitical trends.

Authority Pooling and Regional Organic Agriculture Standard-Setting: Evidence from East Africa

A key characteristic of global organic agriculture governance through standards is the coexistence of regulatory fragmentation and regional integration. To reduce barriers to organic trade, especially for market participants from developing countries, international and transnational entrepreneurs increasingly promote the setting of organic agriculture standards (OAS) in different world regions, for example, in East Africa, the Pacific, or Asia. Although scholars from different disciplines have done a lot of research on the role of standards in global governance, we still know little about why and how regional standard-setting processes evolve. Applying findings from regime analysis, entrepreneurship, and political authority, the article introduces the concept of authority pooling. It argues that legal, moral, and technical authority sources interact in a blurred functional division of labour between the public and the private sector in standard-setting. The article presents results from a within-case study of the development of the East African Organic Products Standard using the process-tracing method. It detects the underlying causal mechanism by which international and transnational entrepreneurs pooled different authority sources and, thus, significantly influenced political actors in East Africa to set the first regional OAS in the developing world.

A Multivariate Generalizability Theory Approach to Standard Setting.

Generalizability theory (G theory) allows researchers to assess the many sources of variance inherent in complex standard setting procedures involving the determination of cut scores. The flexibility of G and D studies provides a way to conceptualize and quantify the results of different standard settings once the universe of admissible observations and the universe of generalization are defined. The current article applies a multivariate single-facet design for estimating standard errors of cut scores. For practical purposes, several multivariate D study designs are used to investigate what effect various panel sizes and test lengths have on the precision of the standard setting process. The current study demonstrates the advantages and usefulness of multivariate G theory in determining the accuracy of cut scores in practical applications of standard setting procedures.

Principles-based vs. rules-based accounting standards: The effects of auditee proposed accounting treatment and regulatory enforcement on auditor judgments and confidence

Using an interest capitalization context, this paper examines the impact of accounting standard type (rules-based vs. principles-based) on the auditor's agreement with an auditee's proposed accounting treatment. Contrary to prior studies that have investigated lease classification contexts, results indicate that auditors are more likely to agree with the auditee's accounting treatment under a principles-based than a rules-based standard. The possibility of a Securities and Exchange Commission (SEC) investigation does not affect auditors' agreement with their auditee's accounting treatment. However, auditors are more confident in the rules-based scenario when they have no knowledge of a possible SEC investigation. Thus, the lack of precision inherent in a principles-based, interest capitalization standard may initially persuade auditors to agree with auditee judgments, but this perception may be moderated by a reduced level of confidence. Those interested in the standard setting process should look beyond the traditional lease structuring scenario and consider the possible effects of other principles-based standards on auditors' judgments and confidence.

Фасилитарные эффекты группового поведения

The paper describes specifi c ways, in which the phenomenon of social facilitation manifests itself in the teamwork of an organizational unit staff , peculiarities
 of teamwork under specifi c conditions, the role of a leader, i.e. moderator, in arranging the workers’ successful creative activities. Also analyzed are typical
 mistakes in moderators’ behavior, being the result of ignorance of certain social and psychological patterns. The paper provides concrete managerial cases
 and algorithms on how to assess each case, shows how the group standard-setting process works; describes six alternatives of how role leadership positions
 can come into play and specifi cs of little groups formation under the conditions of spontaneous set-up and consolidation of group standards of conduct, group
 sanctions of group opinions, group diversity of roles and statuses in the context of any given group orientation towards a leadership position, which can
 manifest itself in various role-playing combinations. Also proposed are basic criteria to assess how well organizational culture of management is being shaped.
 The paper in based on the author’s personal experience in moderating, managing and consulting with respect to his work with the large US-Russian holding
 company (embracing 24 fi rms) as the Director for Strategic Development and Human Resource Management.

Standards and innovation: US public/private partnerships to support technology-based economic growth

This paper examines how strategic alliances to create and use standards affect economic growth and development. The explanation of the link from standards to economic growth and development is through the effects of standards on the incentives to perform industrial research and development (R&D). We examine product standards, metrology traceable to national and international standards, and regulatory standards to address negative externalities. The paper develops a theoretical explanation for the link from standards to growth, survey/interview-guides to gather information from industrial R&D experts about the explanation, and case-study evidence about the explanation. We discuss the standard-setting process and explain that it entails strategic alliances among firms and with government involvement. Case studies of R&D projects in firms and in a national laboratory support the belief that standards implemented via strategic alliances leverage economic growth and development.

Auditor Lobbying on Accounting Standards

We examine how Big N auditors’ changing incentives impact their comment-letter lobbying on U.S. GAAP over the first thirty-four years of the FASB (1973-2006). We examine the influence of auditors’ lobbying incentives arising from three basic factors: managing expected litigation and regulatory costs; catering to clients’ preferences for flexibility in GAAP; and being conceptually aligned with the FASB, particularly on the use of fair values in accounting. We find evidence that auditor lobbying is driven by prevailing standards of litigation and regulatory scrutiny and by support for fair-value accounting. But we find no evidence that catering to clients’ preferences for flexibility in GAAP drives auditor lobbying. Broadly, our paper offers the first large-sample descriptive analysis of the role of Big N auditors in the accounting standard-setting process.

Regards and Views toward International Accounting Standards Setting: A Critical Examination and Discussion

Accounting information is the basis for the stakeholders who take different economic decision time to time by assessing those accounting information reported by the business organization. That’s why; international accounting standard setting committee aims to protect the interest of the stakeholders by formulating a high-quality reporting standard. But this standard setting process is hindered by many external lobbying groups like government, political, economic and corporate group because there are the agency and other problems. This study aims to examine and discuss the theoretical and conceptual frameworks like different approaches and theories like a free market and regulatory approach. Moreover, it is still a debate whether free market or regulatory approach ensures the interest of the stakeholders more. However, this study identifies that standard setting process should be a holistic approach that should protect the interest of not only the stakeholders but also the organization.

Editorial: AABFJ Volume 9, Issue 1, 2015

There are six excellent and diversified papers published in this edition of the Australasian Accounting, Business and Finance Journal. As highlighted below, these papers’ contributions range from issues relating to accounting standard setting process to the efficient market hypothesis including a paper based on alternative accounting research methodology that explores the issues of career choices by women in a developing economy.

Into the Abyss of Standard-Setting: An Analysis of Procedural and Substantive Guarantees within ISO

Continuous innovation and a growing consumer demand for better and safer products has led to an increase of technical standards in recent years. The World Trade Organization (WTO) exercises a high level of deference towards international standards, requiring their use. However, practice shows that several international standards are adopted through opaque and exclusionary processes. In line with this observation, in its recent US-Tuna II ruling, the Appellate Body adopted a more critical approach regarding international standards. Against this backdrop, this paper focuses on an analysis of the properties and mechanics of international standard-setting processes within the International Organization for Standardization (ISO), discussing procedural and substantive guarantees regarding transparency, openness, deliberation and participation. As the WTO becomes the de facto arbiter of the legitimacy of international standards, much-needed institutional reform in international standard-setting is bound to occur, in line with emerging demands for a more inclusive global legal order.

The Userss Primacy Principle in the European Accounting Directive: An Analysis of the Standard-Setting Process

In 2009 the European Commission launched the public consultation on the review of the Accounting Directives as part of the project to modernise and simplify EU accounting rules, which led to the new European Accounting Directive in 2013. This process offers a unique research opportunity to explore the under researched – but extremely relevant – EU accounting standard-setting process, in order to understand constituents’ different orientations on key topics in reporting regulation and the role played by the users’ primacy principle in shaping the new Directive.Results show significant differences in respondents’ views on the choice between mandatory requirements and voluntary disclosure and on differential reporting. Constituents from different geographical contexts do not share the same view on either topic, while users, the accounting profession and preparers express different orientations with regard to mandatory reporting and voluntary disclosure. In the light of these results, the new Directive seems to be inspired by the users’ primacy principle for issues connected to mandatory reporting and voluntary disclosure, in contrast with preparers’ expectations.This study adds to the literature by focusing on the European standard-setting process, which limited research has looked at so far, with theoretical and public policy implications and also provides a basis for further research in this area.

The political economy of fair value reporting and the governance of the standards-setting process: Critical issues and pitfalls from a continental European union perspective

Abstract Accounting is not simply a metric; it is, rather, a calculative practice that shapes the socio-economic environment. To look at the substance of accounting standards alone is therefore sometimes inadequate. From a Continental European Union perspective, this paper provides a general framework that deals with the potential changes in society produced by financial reporting. More specifically, it discusses fair value reporting from two points of view that are closely linked. The first relates to the political economy of fair value reporting and its potential impact on the economic and social system, while the second relates to the governance of the standards-setting process. In discussing such issues, this paper suggests that the fundamental principles set out by the Lisbon Treaty should be used as a framework to analyze financial reporting policies in the European Union.

Selhání užitečnostního přístupu k formulaci účetních pravidel na příkladu nového standardu pro výnosy

Clanek identifikuje možna kriticka mista užitecnostniho přistupu při formulaci ucetnich předpisů. Užitecnostni přistup funguje za normalnich ekonomických podminek pro relativně nekonfliktni ucetni oblasti. Jestliže je koncept porovnavani užitku z informace a nakladů na jeji poskytnuti aplikovan u kontroverznich temat, mohou tvůrci ucetnich standardů snadno podlehnout lobbystickým tlakům připravovatelů ucetnich zavěrek. Přicinou je, že užitky plynou sirokemu spektru uživatelů, kteři jsou znacně diverzifikovani ohledně svých uživatelských potřeb a nemuseji tak mit dostatecně silnou motivaci prosazovat sve zajmy. Na rozdil od relativně homogenni a mensi skupiny připravovatelů ucetnich informaci, kterým se vyplati vynakladat zdroje pro ovlivněni ucetnich předpisů, jestliže tyto zasadně měni ekonomicke hodnoceni jejich financni situace a výkonnosti. Hypoteza možneho selhani užitecnostniho přistupu je zkoumana na přikladu noveho spolecneho standardu IASB a FASB Výnosy ze smluv se zakazniky, a to za využiti kriticke analýzy.

Monopoly versus Competition in Setting Accounting Standards

Financial accounting standards are set by organizations granted a significant degree of monopoly power by various governments. While there has been considerable debate on the merits of national (e.g., US FASB) versus international (IASB) monopolies, little attention has been paid to the merits of using competing standard setting organizations (SSOs) for setting accounting standards. We compare the standard setting processes of the FASB/IASB to the processes of four technology-oriented SSOs to assess the role of competition. We also provide a case study of monopoly and competitive standards in telephony. Both telephony and accounting yield some gains from coordination, and similar arguments are used (under the labels of comparability and consistency of accounting) in debates about granting a monopoly to their respective SSOs. Our results show that a group of volunteers competing with the government-sanctioned monopoly of International Telecommunications Union transformed the telephone industry. Thanks to this standards competition, we enjoy free video internet calling and massive cost savings. Implications for accounting standard setting are discussed.

10 Years Impairment-Only Approach Stakeholderss Perceptions and Researcherss Findings

The IASB emphasizes the demand for academic research in the standard setting process. Ewert and Wagenhofer (2012) specifically refer to the post-implementation review (PIR) process and point out that “academics can, and should, play a significant role in a PIR.” We follow these requests and aim to contribute to the current PIR on IFRS 3 Business Combinations. In particular, we evaluate the impact of the introduction of the impairment-only approach for goodwill accounting in 2004 from two perspectives. Firstly, we analyze the comment letters submitted by stakeholders in response to the Request for Information (RfI) during the PIR. Secondly, we systematically review related academic literature. The analysis of comment letters sheds light on the advantages and disadvantages of the goodwill impairment test perceived by interested stakeholders. By reflecting on these perceptions with respect to academic research, we identify differences between the two perspectives as well as research opportunities. Our findings show that stakeholders’ views about the usefulness of the information provided by the impairment test are mixed, while they share widespread concerns about the cost-benefit relation and the extent of discretion involved in the tests. Academic research tends to support the assumption that the impairment-only approach increases the usefulness of financial reporting. However, the concerns expressed about subjectivity and managerial discretion are confirmed by a number of empirical studies. In this dilemma, we advise the IASB not to withdraw the current concept immediately, but rather recommend some short-term measures to address areas of improvement identified in the PIR. In the long-term, we need a larger project – reasonably in cooperation with the FASB – in which the subsequent treatment of goodwill is holistically reviewed.

Identifying Benchmarks for Applying Non-Discrimination in Frand

Standard setting organizations have for many years asked members to commit to license patents essential to use of standards on Fair, Reasonable and Non-discriminatory, or FRAND, terms. Previous work has shown how standard setting that incorporates patents can lead to complicated situations in which the patent owner, sometimes in collaboration with rival firms, can exploit the market power that is created by being designated a standard essential patent, but that the non-discriminatory provision of FRAND can be interpreted so as to mitigate the inefficiencies that can result when patent owners try to exploit their market power conferred by the standard setting process. This paper discusses the availability of appropriate benchmarks for implementing the non-discriminatory provision and shows how even when license terms for patents are not set in advance, FRAND terms can protect members of an SSO and that this protection can be implemented by using various benchmarks.

Building consensus in life cycle assessment: the potential for a Canadian product category rules standard to enhance credibility in greenhouse gas emissions estimates for Alberta's oil sands

Life cycle assessment (LCA) of greenhouse gas emissions is often used to compare products in the global crude market. While Alberta's oil sands face particular pressure to improve performance, a lack of consensus on methods, data, and assumptions specific to the LCA of products derived from crude oil weaken such comparisons. This paper investigates the potential for a Canadian product category rules standard to enhance the credibility of life cycle emissions estimates of products derived from Alberta's oil sands. Increasing comparability of Canadian crudes to those of other countries in such a way would make this an attractive tool with the potential to be adopted internationally. The potential of the standard is investigated through a case study, based on in-depth expert interviews, focusing first on the potential of the standard to mitigate specific data and communication issues with respect to Alberta's oil sands, and second on strategies to mitigate predicted process issues in its development by a Canadian standards development organization. Findings indicate that while there is a consensus on the need to further standardize LCA methods and data quality requirements for crude oil products to make comparisons more accurate, participants in the standards-setting process may be unwilling to share the information that would make this possible. It was found that a credible standards-setting process may help to overcome this challenge, only if the ability to revise the standard can be anticipated in its initial development process, particularly with respect to its long-term effects on the development of new technologies.

International Banking Standards, Private Law and the European Union

Over the past decades, but especially since the 2008 global financial crisis, there has been a proliferation as well as an intensification of international regulatory processes regarding the activities of banks: this goes from the work of the Basel Committee on Banking Supervision on prudential supervisory standards to the activities of the OECD-based Financial Action Task Force (FATF) on money laundering, the negotiations within the World Trade Organization (WTO)’s General Agreement on Services (GATS) regarding financial services, and the more recent work of the Group of 20 (G20) and the Financial Stability Board (FSB) on issues as diverse as credit rating agencies and systemically important financial institutions. In all of these bodies, the European Union (EU) is involved, though often on a different institutional basis, going from full membership to observer status; some bodies count all EU Member States among their members whereas others are more limited in membership. This contribution looks into the role which the EU plays in this area of standard setting for international banking activities, in particular those norms that can broadly be characterized as ‘regulatory private law’, thereby bringing together both dimensions of ‘EU external relations law’ and ‘private law’. First of all, it is explored how the EU engages in practice within the international banking standard setting processes concerned. It then turns to the impact of international banking standards on internal EU law- and policy-making in a number of chosen areas. The paper attempts to assess the influence which the EU exercises – partly through exporting its own regulatory agenda/acquis - on international law- and policymaking in this area.