Abstract/Summary

Features of rational decision making (such as agenda entrance criteria and statement of jurisdiction) barely conceal the complexity of international accounting standard setting. In 2003, when the international financial reporting standard for small and medium-sized entities (IFRS for SMEs) project achieved agenda entrance, the International Accounting Standards Board’s (IASB) jurisdiction was to develop, ‘a single set of … accounting standards … to help participants in the world’s capital markets’. Drawing on interviewees’ recollections and other material, this study of how the project achieved agenda entrance finds within-IASB opposition to the project, arguing it was outside the IASB’s jurisdiction that dissolved with the realisation that the IASB’s jurisdiction would be changed to encompass the project. Earlier accounting works have shown that an understanding of agenda entrance is critical to understanding the accounting standard setting process. Consider Walker and Robinson (1993; 1994) and Ryan (1998). Kingdon’s (2011) model of agenda entrance helps to show the complexity of the politics and decision making messiness that resulted in a standard setting project for simplified IFRS but titled IFRS for SMEs. The complexity was particularly associated with: (i) the broader international regulatory context requiring adaptation; (ii) the limitations of ostensibly technical barriers to agenda entrance, including the boundary of the IASB’s standard-setting jurisdiction; (iii) jurisdictional competition; and (iv) sensitivities over the language such that the IASB could not agree on a suitably descriptive title. The paper responds to calls for attention to actions of individual board members and staff (Walker and Robinson, 1993; Howieson, 2009).