FASB and IASB: Dependence Despite Independence

35 Pages Posted: 10 Dec 2008 Last revised: 1 Jun 2015

See all articles by Andreas Martin Fleckner

Andreas Martin Fleckner

Humboldt University of Berlin - Faculty of Law; Max Planck Institute for Comparative and International Private Law

Abstract

Most regulatory bodies are either powerful or independent. The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) are both — at least in theory. This paper argues that in practice, the two boards are less powerful and less independent than many critics claim. Both the FASB and the IASB face outside pressure, especially from politics, and both have made concessions to please their constituencies. Plato's famous philosopher kings illustrate why: without rulemaking powers, accounting experts will never be as independent as if they were legislators.

Note: This article is based on a briefing paper prepared for the EU-US Financial Services Roundtable (2005) and on a presentation held at the Future of IASB-Funding Conference (2006).

Keywords: FASB, IASB, IAS, IFRS, accounting, internationalization, legal harmonization, standardization

JEL Classification: F50, G15, G18, G38, K22, M41, M48

Suggested Citation

Fleckner, Andreas Martin, FASB and IASB: Dependence Despite Independence. Virginia Law & Business Review, Vol. 3, pp. 275-309, 2008. Available at SSRN: https://ssrn.com/abstract=1310290

Andreas Martin Fleckner (Contact Author)

Humboldt University of Berlin - Faculty of Law ( email )

Unter den Linden 6
Berlin, 10099
Germany

Max Planck Institute for Comparative and International Private Law ( email )

Mittelweg 187
Hamburg, 20148
Germany

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