A European View on the Legitimacy of Accounting Procedures: Towards a Deliberative-Accountability Framework for Analysis
Ulf M.T. Luthardt
University of Bremen - Faculty of Business Studies and Economics; University of Bremen - Chair of Accounting and Control
February 28, 2010
Research in Accounting Regulations, Vol. 21, No. 2, 2009
Accounting rules affect fundamental areas of social interaction encompassing groups that have diverse and conflicting interests regarding financial reporting. In the absence of a coherent social choice theory, concepts of legitimacy can be used to assess the acceptance of accounting standard-setting processes and their resulting norms. In this paper, we analyze the standard-setting process in Europe. Accounting rules in Europe are developed in a two-stage process involving both private standard-setting and public rule-making. From a structural perspective, the European Union (EU) is well positioned to develop legitimate accounting procedures. However, the original purpose and the ensuing legitimacy of its control mechanism are jeopardized when EU structures are used and sometimes abused for policy formation and the creation of EU-IFRS.
Keywords: accounting regulation, social choice theory, European Union, IFRS
JEL Classification: M41Accepted Paper Series
Date posted: February 28, 2010
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