Professional Backgrounds of Accounting Standard Setters and Changes in the Current Value Orientation of IFRS

44 Pages Posted: 11 Feb 2014 Last revised: 20 Jan 2017

See all articles by Marcus Witzky

Marcus Witzky

London School of Economics & Political Science (LSE) - Centre for Analysis of Risk and Regulation

Date Written: January 1, 2017

Abstract

This paper investigates whether and how the professional backgrounds of International Accounting Standards Board (IASB) members are associated with changes in the current value orientation of International Financial Reporting Standards (IFRS). Current value measurement bases include fair value measurement and related approaches. I find IASB members with prior experience in private accounting standard setting or in the preparation of financial statements to be positively associated with increases in the current value orientation. Weaker evidence suggests the same for former users of financial statements. In contrast, IASB members with prior experience as public regulators, auditors or accounting professors are negatively associated with increases in the current value orientation. In line with the upper echelons theory, I interpret the professional backgrounds of IASB members as proxies for idiosyncratic characteristics which filter and distort information perception. Hence, even in the absence of ideology or regulatory capture standard setters might not be neutral and their professional backgrounds would be of strategic importance when selecting new IASB members.

Keywords: Standard Setting, IASB, IFRS, Current Value, Fair Value, Upper Echelons Theory

JEL Classification: D72, D78, M40, M41, M48

Suggested Citation

Witzky, Marcus, Professional Backgrounds of Accounting Standard Setters and Changes in the Current Value Orientation of IFRS (January 1, 2017). Available at SSRN: https://ssrn.com/abstract=2394193 or http://dx.doi.org/10.2139/ssrn.2394193

Marcus Witzky (Contact Author)

London School of Economics & Political Science (LSE) - Centre for Analysis of Risk and Regulation ( email )

London WC2A 2AE
United Kingdom

HOME PAGE: http://sites.google.com/view/witzky

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