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2016 | OriginalPaper | Buchkapitel

An Institutional Theory Perspective on Accounting Evolution: Rulemakers’ Belief and Empirical Evidence

verfasst von : Hideki Fujii

Erschienen in: IFRS in a Global World

Verlag: Springer International Publishing

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Abstract

In recent years, why have we so often observed the setting of accounting rules that are not in keeping with, or have even gone against, the empirical evidence shown by archival studies? And, if these accounting rules are not based on facts that have been reported in the form of empirical evidence, then what has determined this rulemaking? Through answering these two questions, this paper demonstrates the formation process of accounting rules and the possibilities that exist for them to evolve, chiefly based on Comparative Institutional Analysis. The discussion and analysis show that rulemakers’ belief in “protecting the market” has been overriding the facts that stem from the market and playing a key role in standards setting process. The absence or presence of value relevance of accounting information is not the guideline for rulemaking but the result of it. As market participants become more acquainted with a new rule, their understanding of the accounting information supplied under the rule becomes institutionalized, which may explain evolutionary process of institutional change in accounting as a whole.

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Vorheriges Kapitel Frère Jacques and IFRS: Sonnez les Matines?

Nächstes Kapitel Financial Reporting and Fair Value: Where Do We Stand?

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In this paper, the term “archival study” is used to mean accounting research, the main aim of which is to find out correlation between variables by statistical analysis of archival data. They are also referred to as “empirical study.”

The examples of such studies are Dechow (1994), Penman and Sougiannis (1998), Quirin et al. (1999), Francis et al. (2000), Fujii and Yamamoto (2001).

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Some recent archival studies, albeit in very small numbers, have presented empirical evidence to demonstrate that comprehensive income is more value relevant than net income. See Hirst et al. (2001), Biddle and Choi (2002).

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Titel: An Institutional Theory Perspective on Accounting Evolution: Rulemakers’ Belief and Empirical Evidence
verfasst von: Hideki Fujii
Verlag: Springer International Publishing
Buch: IFRS in a Global World
Print ISBN: 978-3-319-28223-7

Electronic ISBN: 978-3-319-28225-1

Copyright-Jahr: 2016
DOI: https://doi.org/10.1007/978-3-319-28225-1_4