'No Comment': Language Frictions and the IASB's Due Process

58 Pages Posted: 17 Apr 2023 Last revised: 27 Mar 2024

See all articles by Eduardo Flores

Eduardo Flores

University of São Paulo - School of Economics, Business and Accounting

Brian Monsen

Ohio State University (OSU) - Department of Accounting & Management Information Systems

Emily Shafron

Texas A&M University - College of Business and Technology

Christopher G. Yust

Texas A&M University

Date Written: March 1, 2024

Abstract

The International Accounting Standards Board (IASB) asserts that global stakeholder participation in the standard-setting process is critical for developing and maintaining high-quality accounting standards. However, the myriad languages used in countries that apply International Financial Reporting Standards (IFRS) may impede this participation. We find that the IASB is less likely to receive comment letters from stakeholders in countries with languages that are linguistically distant from English. We also find that comment letters from more linguistically distant stakeholders are less likely to be quoted in IASB staff-prepared comment letter summaries, suggesting that they have less influence in the redeliberation process. Path analyses show that this result arises from language frictions being associated with reduced writing quality and originality. We also find that language frictions prevent participation in other standard-setting communication channels. Collectively, language frictions appear to impede the IASB’s efforts to equitably obtain and consider valuable global feedback.

Keywords: IFRS, language frictions, standard setter, lobbying, comment letters, diversity

JEL Classification: D72, D78, D91, F38, G15, L51, M41, M48

Suggested Citation

Flores, Eduardo and Monsen, Brian and Shafron, Emily and Yust, Christopher, 'No Comment': Language Frictions and the IASB's Due Process (March 1, 2024). Available at SSRN: https://ssrn.com/abstract=4408178 or http://dx.doi.org/10.2139/ssrn.4408178

Eduardo Flores

University of São Paulo - School of Economics, Business and Accounting ( email )

Rua Luciano Gualberto, 315
São Paulo, São Paulo 14800-901
Brazil

Brian Monsen

Ohio State University (OSU) - Department of Accounting & Management Information Systems ( email )

2100 Neil Avenue
Columbus, OH 43210
United States

Emily Shafron

Texas A&M University - College of Business and Technology ( email )

Commerce, TX 75429-3011
United States

Christopher Yust (Contact Author)

Texas A&M University ( email )

430 Wehner
College Station, TX 77843-4353
United States
979.845.3439 (Phone)

HOME PAGE: http://www.christopheryust.com

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