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11.brown 0089www.iiste.org call for_paper-103

  1. 1. Issues in Social and Environmental AccountingVol. 2, No. 1 June 2008Pp. 89-103 The Extent of Membership Representation and Non-Representation on the IASB Alistair Brown School of Accounting Curtin University of Technology, AustraliaAbstractStatus groups abound in financial markets and none more so than in the global accounting mar-ket. One such group is the powerful and closed International Accounting Standards Board(IASB). This study empirically examines the social control of IASB membership by consider-ing the country affiliation of members, Internet access, and gender composition over a five-yearperiod. The results of the study show that over the period 2001-2005 representation on all fourIASB committees was dominated by male members from high Internet access regions of theUnited States of America.Keywords: IASB, closure and membershipINTRODUCTION ternational Accounting Standards Board (IASB) for the benefit of elite multina-The deep-seated occupational practice of tional funding organisations (Porter etclosure1 has occurred amongst occupa- al., 2006) and privileged first-world ac-tional sets for some considerable time counting practitioners (Chand and(Macdonald, 1985). Past studies show White, 2007) including Group of Fourhow elite domestic accounting associa- (G4) and US exertion of ‘soft power’tions are closed to all but a narrow range over the IASB (Street, 2006; De Langeof individuals whose social backgrounds & Howeison, 2006). Few studies, how-reflect the most powerful groups in soci- ever, have empirically considered theety (Kirkham & Loft, 1993), at times supranational IASB’s sustained non-legitimising claims for special privilege equilibrium membership conditions(Macdonald, 1985; 1984). Past studies (closure) over a long period of time.also show how closure occurs at the In- This study addresses this shortcoming by considering the composition of the1 A philosophical definition of closure is presented in membership of the four committees ofthe following way: “a set is closed with respect of an the IASB over the period 2001-2005 byoperation if the result of applying that operation to a way of each member’s national repre-member of the set is itself a member of theset” (Blackburn, 2005; p. 64). sentation, Internet access, and gender.Alistair M. Brown is Associate Professor, Governance & Corporate Social Responsibility Research, School of Ac-counting, Curtin University of Technology, Australia, email: Alistair.Brown@cbs.curtin.edu.au
  2. 2. 90 A. Brown / Issues in Social and Environmental Accounting 1 (2008) 89-103This study is important because it pre- The aim of this study, therefore, is tosents a quantitative picture over time of examine the magnitude and extent ofthe main players and non-players of the closure on each of its four committees.international standardising and harmo- This paper is organised as follows. Thenising accounting set. There is consider- next section examines the IASB mem-able literature which sees the IASB as bership in terms of its US affiliation,advancing the public interest Internet access and gender type. A sepa-(Camfferman and Zeff, 2007) and its rate section is devoted to explaining theInternational Financial Reporting Stan- research method, which is then followeddards as improving investor communica- by descriptive and inferential results.tion, enhancing comparability, increas- The study ends with a conclusion abouting reporting transparency, lowering the about the characteristics of the mem-costs, facilitating cross-border listings bership of the IASB, and a discussion ofand improving investment opportunities the assumptions and limitations of the(KPMG, 2003). But all these benefits study.ring hollow if the IASB is effectivelyrepresented by a narrow range of power-ful players to the restriction and exclu- LITERATURE REVIEWsion ‘economically weaker stake-holders’ (Unerman & Bennett, 2004, p. The accounting profession is awash with690). practices of exclusion, closure, and mo- nopoly (Kim, 2004; Annisette, 2003;What is vitally important here is to pre- Chua & Poullaos, 1998; Walker, 1995;sent a study which shows the extent of Chua & Poullaos, 1994; Kirkham &hegemonic power enjoyed by the ‘closed Loft, 1993; Kedslie, 1990; Wilmott,set’ and the magnitude of non- 1986; Macdonald, 1985; 1984). Self-representation by most countries of the selected occupational elites are able toworld, not only on the main boards of use exclusionary practices to keepthe IASB but also on its committees. By ‘others’ out of the profession. They de-analysing the preponderance of country ploy closure practices to close off oppor-membership, this study alerts us to a tunities to ‘others’; to enjoy the profes-broader lesson: that while the measure- sion’s economic, political, and socialment of hegemonic membership is in- fruits (Annisette, 2003). Such practicesstructive to understanding the extent of may be based on credentialism, ethnicitypower enjoyed by a few, the measure- (Kim, 2004; Annisette, 2003), financialment of absence of country membership resources (Mitchell et al., 2001) and im-underlies the extent of powerlessness perialism (Annisette & Neu, 2004), butsuffered by the many. This has consider- ultimately they lead to an asymmetry ofable policy relevance, particularly in wealth and power (Graham & Neu,terms of developing accounting policies 2003).across the globe. It is difficult to secondguess policy makers’ needs around the US affiliationworld but if many potential policy mak-ers are effectively excluded the problem The IASB describes its structure asof ascertaining their needs becomes ‘independent’ (IASB, 2007b). The IASBmore difficult. has two main bodies, The Trustees1 and
  3. 3. A. Brown / Issues in Social and Environmental Accounting 1 (2008) 89-103 91the International Accounting Standards instance, the restructuring of theBoard. The IASB also has a Standards IASC into the IASB in 2000Advisory Committee (SAC) and an In- expressly reflects the thinking ofternational Financial Reporting Interpre- the SEC and has resulted in antations Committee (IFRIC). Further, it organizational form traditionallyexplains that ’the international conver- opposed by continental Euro-gence of accounting is the irreversible pean countries.The FASB nowtrend and direction of develop- also plays an active role in thement’ (IASB, 2007b); and that: IASB’s activities,and five of the IASB’s twelve full-time and two Emerging markets and transition part-time board members are economies are important partici- American. Two of those full- pants in the global capital market time IASB board members sat and users of IFRSs, thus they will on the FASB board until re- play an important role in IFRSs cently. If this influence grows setting (IASB, 2007b). unchecked, it may bias the na- ture of the IFRS in favor of USHowever, much appears in the past lit- markets and consequently re-erature to suggest that the IASB is not duce the global benefits of con-independent at all, with domination by tinued convergence (Carnachan,the Financial Accounting Standards 2003, pp. 39-40).Board of the United States of America(De Lange & Howeison, 2006), G4 na- US representation on the IASB is em-tional accounting standard setting bodies pirically tested by posing the following(Street, 2006), and the presence of a hypothesis:general ‘US/UK hegemony’ Chand andWhite (2007, p. 610). Hypothesis 1: There is significant US representation on IASBIndeed, the imposition of North-American-centric accounting on global- Internet accessised markets is recognised by some com-mentators (Camfferman and Zeff, 2007; Another form of closure practised by theZarb, 2006; Cooper, Neu and Lehman, IASB is to overlook members from2003, p. 360). Some commentators sug- countries with limited Internet accessgest there is too much U.S. influence on (Brown, 2007). The IASB devotes con-IASB (EFRAG, 2006; Carnachan, siderable resources to extensible busi-2003). ness reporting language (XBRL) (IASB, This concern about potential US 2007c) and business reporting on the hegemony over the international Internet (IASC, 1999) which necessi- accounting standard-setting tates a reliance on the Internet but does process is not without founda- little to extend these resources to coun- tion. There is already evidence tries with little Internet access. of a growing US influence over IFRS, despite the ‘due process’ The potential for the Internet to advance safeguards built into the IASB’s discourses depends on the existing insti- standard-setting procedures. For tutionalised structures and dominant po-
  4. 4. 92 A. Brown / Issues in Social and Environmental Accounting 1 (2008) 89-103litical philosophies (Sikka, 2006). In erts 2004; McNicholas et al., 2004; Gall-terms of institutional structures, Kenis- hofer, 1998) and business organisations.ton (2004), Swaminathan (2001) and Certainly, in a developed country set-Warschauer (2002) found that a lack of ting, Still (2006), found that despite con-access to the Internet2 is an obvious im- siderable legislative, policy, and socialpediment to Internet use. However, in change in the equity area, women didterms of dominant political philosophies, not attain leadership positions in anythis paper argues that these institutional significant numbers in Australia. Higgsbarriers may confer legitimacy to the (2003) found that women in the UK didprivileged IASB group, a high-level of little better.Internet access acting as a prerequisitefor IASB membership. The notion of There are of course, compelling reasonspromoting social differentiation by way` to broaden gender diversity on theof Internet access helps advance digital board, as it:kudos for the occupational elites but re-stricts those members with less sophisti- …increases board independencecated Internet structures from advancing. because with a different gender,The idea of selecting members from ethnicity, or cultural backgroundcountries with high levels of Internet might ask questions that wouldaccess as against those members who not come from directors withcome from countries with low levels of more traditional backgroundsInternet access is presented in the fol- (Carter, Simkins and Simpson,lowing hypothesis: p.37).Hypothesis 2: There is a positive rela- Broader board diversity is also associ-tionship between national levels of Inter- ated with stronger orientation towardnet access and membership of IASB corporate social responsiveness (Ibrahim & Angelidis, 1994), higher levels of so-Gender cial performance (Siciliano, 1996) and an increase in diversity of opinions andYet another way of closing off member- perspectives to board discussions. Ofship is to exclude people according to course, these benefits come at the ex-their gender. Even though gender diver- pense of diluting male hegemony. Thus,sity on committees can improve effec- for the purposes of this study the follow-tiveness of organisation’s decisions by ing hypothesis is posed:tapping broader talent pools (Adams &Ferreira, 2004) there is a considerable Hypothesis 3: There is significant maleliterature that points out that women representation on IASBcontinue to be excluded from accounting(Everett et al., 2007; Kirkham & Loft,1993; Hopwood, 1987; Dwyer & Rob- RESEARCH METHOD2 Together with the high costs of Internet subscription, The main methods of inquiry are secon-shortages of internet service providers and hard-wireddirect lines, lack of hardware (computers), high prices dary analysis of cross-sectional datain administration, installation settings, maintenance and from the most recent data from IASBperipherals, and lack of electricity to drive available annual reports on membership of theinformation technology.
  5. 5. A. Brown / Issues in Social and Environmental Accounting 1 (2008) 89-103 93IASB Trustees IASB, IFRIC and SAP, Actual membership over the period didmembers’ country affiliation and mem- not always accord with the numbersbers’ country Internet access. Statistical stated in the constitution. The initialanalyses used in the study include de- population of aggregated membership ofscriptive techniques, trend analysis, and the Trustees, IASB, IFRIC and SAC overmultiple regression analysis. the period 2001 to 2005 was 423. Table 1, Panel A shows that The Trustees’ hadThe main data sources used in this study 18 members, except for 2003 whenwere the 2001-2005 annual reports of membership was 19. Total membershipthe IASB (IASB, 2005; 2004; 2003; of The Trustees for the period 2001 to2002; 2001), online IASB documenta- 2005 was 91. For each year IASB andtion for 2006, and internet access data IFRIC membership was 14 and 12, re-for the years 2001-2005 from Interna- spectively. For the period 2001 to 2005tional Telecommunications Union (ITU, the IASB and 60 IFRIC had 70 member2007). positions. SAC membership for each of the years between 2001 and 2004 rangedSample selection from 41 to 43, but in 2005 this fell to 33 members. There were 202 SAC mem-The IASCF Constitution (2007) states bership positions for the period 2001 tothat The Trustees shall comprise 22 indi- 2005. Country affiliation data of mem-viduals (para. 4) who are normally ap- bership positions of Trustees, IFRIC andpointed for a term of three years, renew- SAC was gathered from the online theable once (para. 8). IASB also comprises IASB annual report sites (IASB, 2007b).14 members (para. 18) to be appointed Country affiliation of IASB membersfor a term up to five years, renewable was gleaned from curriculum vitaesonce. IFRIC comprises 12 members ap- posted on the IASB websites (IASB,pointed for renewable terms of three 2007b). Information on Gender wasyears (para. 33), and SAC comprises 30 checked by two academics.or more members appointed for renew-able terms of three years (para. 48). Table 1, Panel B shows the number of countries used in the sample.. The World Table 2: Breakdown of country membershipPanel A: Number of board’s membership Year Trustees IASB IFRIC SAC Total 2001 18 14 12 43 87 2002 18 14 12 42 86 2003 19 14 12 43 88 2004 18 14 12 41 85 2005 18 14 12 33 77 Total 91 70 60 202 423Panel B: Number of countriesTotal number of countries 209Less: Countries without internet access data (5)Total number of countries used in sample 204
  6. 6. 94 A. Brown / Issues in Social and Environmental Accounting 1 (2008) 89-103Bank (2005; 2004; 2003; 2002; 2001) Proxy for Internet accesslists 209 countries in the world. Fivecountries were excluded from the sam- Internet access data provides informa-ple because of insufficient Internet ac- tion on the number of Internet users percess data figures for the five-year period. 100 inhabitants of a country for a par-These countries were American Samoa, ticular year. This information was gath-Liberia, Myanmar, North Korea and ered from ITU (2007).Northern Mariana. Thus a total sampleof 204 countries were used in the study. Yet again, each of the 423 memberships positions were classified by affiliation toProxy for IASB membership divide one of the possible 204 countries. The number of membership positions forThe main dependent variable, account- each of the 204 countries was tallied anding divide (DV1), is the average yearly then multiplied by that country’s Inter-number of membership positions on all net access of the respective year (2001-four committees (Trustees, IASB, IFRIC 2005) that the member was in office.and SAC) by country affiliation for the The aggregated Internet access score ofperiod 2001 to 2005. each country was then divided by five (the number of years of the study) toEach of the 423 memberships positions give a mean annual Internet accesswere classified by affiliation to one of scores. These Internet access scores sat-the possible 204 countries (a member- isfied tests for non-normality and non-ship position could not have more than skewness. The study uses the Internetone country affiliation – see the section access data from 2001 to 2005 from theAssumptions and Limitations). The num- data-sets of the International Telecom-ber of membership positions for each of munications Union (ITU, 2007).the 204 countries was tallied for each ofthe five years of the study and then di- Gendervided by five to give an average yearlymembership score for each country. Gender was used as a control variable. Figure 1 Conceptual Schema
  7. 7. A. Brown / Issues in Social and Environmental Accounting 1 (2008) 89-103 95Unlike the country related proxies used membership on at least one of the fourfor the dependent variable and the inde- IASB committees over the study period.pendent variables (US affiliation and In all, 169 countries did not have anyInternet access), gender was a demo- membership at all.graphic related characteristic of the indi-vidual members. Each of the 423 mem- Panel B of Table 2 shows descriptivebers was classified according to gender. statistics for 2001-2005 of IASB mem-As Figure 1 shows, gender falls outside bership of the four committeesthe oval containing country classifica- (Trustees, IASB, IFRIC or SAC) with antion but provides additional evidence of overall annual mean membership of 0.42divides outside the country context. members per country with a large stan- dard deviation of 1.77 members per country. The US had a staggering annualRESULT average of 21.40 members on the four committees of the IASB, while the otherDescriptive Statistics 203 had an average of 0.37 members. Independent sample T-test (t-criticalPanel A of Table 2 shows the break- one-tail score of 1.65) shows a highlydown of country membership on each of significant difference between US andthe four committees of the IASB for non-US means for membership (p-value2001-2005. Thirty-five countries had of .000). Panel B presents descriptive Table 2: Breakdown of country membershipPanel A: Countries with board membershipNo. Country 2001 2002 2003 2004 2005 Average 2001-2005 T M I S T M I S T M I S T M I S T M I S T M I S Total 1 Argentina 0 0 1 1 0 0 1 1 0 0 1 1 0 0 1 1 0 0 1 1 0 0 1 1 2 2 Australia 1 1 1 1 1 1 1 1 1 1 1 1 1 1 0 1 1 1 0 1 1 1 1 1 3.6 3 Bahrain 0 0 0 1 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0.4 0.4 4 Belgium 0 0 0 1 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0.4 0.4 5 Brazil 1 0 0 1 1 0 0 1 1 0 0 1 1 0 0 1 1 0 0 1 1 0 0 1 2 6 Cameroon 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0.2 0.2 7 Canada 1 1 0 1 1 1 0 1 1 1 0 1 1 1 0 1 1 1 0 0 1 1 0 0.8 2.8 8 China 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 1 1 9 Denmark 1 0 0 1 1 0 0 1 1 0 0 1 1 0 0 1 1 0 0 0 1 0 0 0.8 1.810 Estonia 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 0 0 0 0 0.8 0.811 Finland 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 0 0 0 0 0.8 0.812 France 1 1 1 3 1 1 1 2 2 1 1 2 1 1 2 2 1 1 2 2 1 1 1 2.2 5.813 Germany 1 1 0 1 1 1 0 1 1 1 0 1 1 1 0 1 1 1 0 2 1 1 0 1.2 3.214 Hong Kong, 1 0 1 1 1 0 1 1 1 0 1 2 1 0 0 1 1 0 0 1 1 0 1 1.2 2.8 China15 India 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 1 116 Israel 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 1 117 Italy 1 0 1 1 1 0 1 1 1 0 1 2 1 0 1 2 0 0 1 3 1 0 1 1.8 3.618 Japan 2 1 1 2 2 1 1 2 2 1 1 2 2 1 1 2 2 1 1 2 2 1 1 2 619 Kenya 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 0 0 0 0 0.8 0.820 Korea (Rep.) 0 0 0 1 0 0 0 1 0 0 0 0 0 0 0 1 0 0 0 1 0 0 0 0.8 0.821 Malaysia 0 0 0 1 0 0 0 1 0 0 0 2 0 0 0 2 0 0 0 1 0 0 0 1.4 1.422 Mexico 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 1 123 Netherlands 1 0 1 1 1 0 1 1 1 0 1 1 1 0 1 1 1 0 1 1 1 0 1 1 324 New Zealand 0 0 0 1 0 0 0 1 0 0 0 1 0 0 1 1 0 0 1 0 0 0 0 0.8 1.225 Norway 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0.2 0.2
  8. 8. 96 A. Brown / Issues in Social and Environmental Accounting 1 (2008) 89-10326 Russia 0 0 0 1 0 0 0 1 0 0 0 2 0 0 0 1 0 0 0 1 0 0 0 1.2 1.227 Singapore 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 0.6 0.628 South Africa 1 1 0 1 1 1 0 1 1 1 0 1 1 1 0 1 1 1 0 1 1 1 0 1 329 Spain 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 1 1 0 0 1 0 0 0 1 1.230 Sri Lanka 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0.6 0.631 Swaziland 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0.2 0 0 0.232 Sweden 0 0 0 1 0 0 0 1 0 0 0 1 0 1 0 1 0 1 0 0 0 0.4 0 0.8 1.233 Switzerland 0 0 0 0 0 1 0 0 0 1 0 0 0 0 0 0 1 0 0 1 0 0.4 0 0.2 0.834 United Kingdom 1 2 1 2 1 2 2 2 1 2 2 2 1 2 2 2 1 2 2 2 1 2 2 2 6.835 United States 5 5 4 10 5 5 3 10 5 5 3 9 5 5 3 9 4 5 3 4 5 5 3 8.4 21.4 Total 18 14 12 43 18 14 12 42 19 14 12 43 18 14 12 41 18 14 12 33 18 14 12 40.4 84.6169 countries did not have membership on any of the committees.Panel B: Descriptive Statistic of Independent and dependentvariablesVariable Num- Mean Std Dev ber(IV 1) US Member- 1 21.40ship Non-US 203 0.37 0.99Membership(DV 1)Total Mem- 204 0.42 1.77bership(IV 2) Internet 204 11.34% 13.42%Accessstatistics for the independent variable of in the study. In other words, there is noInternet access which has a mean of high correlation between US member-11.34% of a country’s population, and a ship and Internet access independentstandard deviation of 13.42. variables with a correlation of 0.175. The lack of multicollinearity partly satis-Correlations fies the condition for running multiple regressions.Table 3 shows no multicollinearity prob-lems for the independent variables used Multivariate main results Table 3: Pearson correlation matrix DV-1 Total IASB IV-1 US v Non-US IV-2 Internet Access DV-1 Total IASB - .832* .372* IV-1 US v Non-US .832* - .175 IV-2 Internet Access .372* .175 -*Correlation is significant at the 1% level (two-tailed)For sensitivity analysis, regression was predictors of each of the four commit-conducted on the dependent variables of tees of the IASB with adjusted R-membership on each of the four commit- squares ranging between .555 (IFRIC)tees of the IASB: Trustees (DV-2); Main and .735 (IASB Main).IASB (DV-3); IFRIC (DV-4) and SAC(DV-5) over the same time period. Additional analysis was conducted on gender of members of all four commit-Table 5 shows that US membership and tees of the IASB over the period 2001-Internet access are highly significant 2005 (see Table 6). Over the period
  9. 9. A. Brown / Issues in Social and Environmental Accounting 1 (2008) 89-103 97 Table 4: Multiple regression model results IASB membership (2001-2005) Beta t-statistic Significance(Constant) -0.360 .000***IV-1 US Representation .792 21.901 .000***IV-2 Internet Access .233 6.443 .000***Model SummaryR-Squared .863Adj. R-Squared .745F-Statistic 294.380Sample Size 204*** Highly Significant Table 5 Multiple Regression Results for Trustees, Main IASB, IFRIC and SAC Panel A Trus- Panel B Main Panel C IFRIC Panel D SAC tees IASB Beta t-statistic Beta t-statistic Beta t-statistic Beta t-statistic[Constant] -.776 -.637 -.676 .400US Respre- .728 17.179* .813 22.144** .680 14.294** .774 20.654*sentation ** * * **Internet .243 5.747** .168 4.586*** .215 4.517*** .245 6.529**Access * *Model SummaryR-Squared .651 .737 .559 .726Adj. R- .647 .735 .555 .723SquaredF-Statistic 187.138 282.168 127.601 266.441Sample Size 204 204 204 204*** Significant at the 1% level2001-2005, all committees had less than IASB membership divide exists both in20% female representation. The low rep- terms of US affiliation, levels of Internetresentation of women on each of the access and gender orientation. US influ-committees provides support for H3. ence of global accounting is, of course, generally well- known in the accounting literature. However, this study’s empiri-LIMITATIONS, DISCUSSION AND cal evidence of US representation on theCONCLUDING REMARKS IASB and each of its four committees indicates the broad extent of US domi-The support of all hypotheses makes nance. The finding of closure to theconcrete the idea that an overwhelming ‘digitally weaker stakeholder’ is an im-
  10. 10. 98 A. Brown / Issues in Social and Environmental Accounting 1 (2008) 89-103 Table 6: Additional analysis - Breakdown by female ratio Trustee Fe- IASB Female IFRIC Fe- SAC Female Total Female male Ratio (Total male Ratio (Total Ratio (Total Year Ratio (Total IASB Mem- Ratio (Total SAC Mem- Boards’ Trustee Mem- bers) IFRIC Mem- bers) Members) bers) bers) 0 0.143 0.167 0.163 0.125 2001 (18) (14) (12) (43) (88) 0 0.143 0.167 0.167 0.126 2002 (18) (14) (12) (42) (87) 0 0.143 0.083 0.186 0.122 2003 (19) (14) (12) (43) (90) 0 0.143 0.250 0.195 0.149 2004 (18) (14) (12) (41) (87) 0 0.143 0.250 0.152 0.128 2005 (18) (14) (12) (33) (78) 0 0.143 0.183 0.173 0.132 2001-2005 (91) (70) (60) (202) (56)portant one, as it demonstrates how the tion process. Nevertheless, this study isrelatively new globalised social fruit— purposefully constitutive to draw outthe Internet and its access—is used to empirically the trends and extent ofdifferentiate between the haves and board membership closure.have-nots and confer legitimacy on Second, the study ignores many socialIASB membership. Few readers will be factors such as religion, racism, and eth-surprised by the closure to women on the nicity as possible explanatory factors offour boards of the IASB; it has proved a the closure. Some prior accounting stud-fraught exercise trying to break up prac- ies looked at these factors for nationaltices of female closure, exclusion, and standard setting bodies and certainlymonopoly by many institutions. future research might separately con- sider their impact on the membership ofThe study has a number of limitations. this global accounting organisation.First, it focuses on constitutive, ratherthan rhetorical (or the nexus of constitu- Third, the concept of country affiliationtive and rhetorical) aspects of the IASB, is problematic, particularly given theand thereby ignores how this powerful multiple work locations of many of theglobal accounting authority uses rhetoric IASB members. While this study recog-to implement and shape control of mem- nises the shifting geographical work pat-bership. When artfully used to persuade, terns of these affluent IASB members,rhetorical techniques, in the hands of the and the possibility that members maypowerful, make for interesting investiga- possess more than one citizenship, theirtion. Indeed, the IASB has a set of writ- predominant country affiliation is con-ten criteria on IASB’s appointments; sidered important not only because thefurther research using rhetorical analysis IASB publishes this information itself onmay shed additional light on their selec- its web pages and in its annual reports
  11. 11. A. Brown / Issues in Social and Environmental Accounting 1 (2008) 89-103 99but also because it gives an expression Notes 1of the general terrain and source of The Trustees appoints IASB, IFRICprivileged country IASB membership. and SAC members, oversee operations and raise funds while the IASB sets ac-Fourth, there is a growing body of litera- counting standards and IFRIC interpretsture that is cautious about the IASB and them.the universal adoption of its Interna- 2tional Financial Reporting Standards It also claims that emerging economies(IFRS) (Hopper & Hoque, 2004; Gra- are represented on the IASCF Trusteesham & Neu, 2003). Some commentators and Standards Advisory Council (SAC)have recognised that these standards and play an important role in IFRSs set-convert complex realities into recognis- ting (IASB, 2007b)able information (Saravanamuthu, 2004)but efface cultural (Baskerville, 2003),political (Graham & Neu, 2003) and Referencescommunication differences between na-tions. IFRS may also fail to recognize AASB (2004) Framework of the Prepa-impacts on local communities (Lehman, ration and Presentation of Fi-2005) and the natural environment nancial Statements. Retrieved(Porter et al., 2006). A limitation of the Aug. 11th. 2007, from http://study, therefore, is that if the output of www.aasb.com.authe IASB is inappropriate to regions out- Adams, R. B., & Ferreira, D. (2004)side the IASB power-base, then the issue "Gender Diversity in the Board-of IASB exclusion, closure, and monop- room", ECGI Finance Workingoly becomes less relevant. Nevertheless, Paper, No. 58 (November), pp.as noted earlier, the study is important 1-31.because there is a body of expertise that Annisette, M. (2003) "The Colour ofsuggests the IASB advances public in- Accountancy: Examining theterest (Camfferman and Zeff, 2007) and Salience of Race in a Profes-serves the international community sionalisation Project", Account-(KPMG, 2003). Indeed, Zeghal and ing, Organizations and Society,Mhedhbi (2006) found that developing Vol. 28, No.7/8, pp. 639-674.countries with high literacy rates, capital __________ & Neu, D. (2004)markets, and Anglo-Saxon cultures were "Accounting and Empire: anlikely to adopt international accounting Introduction?" Critical Perspec-standards. Thus, the thrust of the re- tives on Accounting, Vol. 15, pp.search aim of this paper is important. 1-4. Baskerville, R. F. (2003) "HofstedeDespite these limitations, the results of never Studied Culture", Ac-this study demonstrate that IASB’s on- counting, Organizations andgoing maintenance of control on its Society, Vol. 28, No.1, pp. 1-14.membership is a source of concern, not Blackburn, S. (1996) Oxford Dictionaryonly to the international accounting of Philosophy. St Ives: Oxfordcommunity the IASB supposedly serves, University Press.but also to the women and low Internet Brown, A. M. (2007) "Bridging the Di-access citizens it snubs. vides of Online Reporting", Ac-
  12. 12. 100 A. Brown / Issues in Social and Environmental Accounting 1 (2008) 89-103 counting Forum, Vol. 31, No.1, ganizations and Society, Vol. pp. 27-45. 23, No.2, pp. 155-187.Camfferman, K. & Zeff, S. A. (2007) Cooper, C., Neu, D., & Lehman, G. “Financial Reporting and Global (2003) "Globalisation and its Capital Markets”, New York: Discontents: A Concern about Oxford University Press. Growth and Globalization", Ac-Carnachan, R. (2003) “A Third Way: counting Forum, Vol. 27, No.4, The Case for Competition Be- pp. 359-364. tween US GAAP and IFRIS in De Lange, P., & Howeison, B. (2006) US Capital Markets”, Interna- "International Accounting Stan- tional Financial Seminar, Har- dard Setting and US exconcep- vard Law School, Cambridge tionalism", Critical Perspectives Massachusetts, April, http:// on Accounting, Vol. 17, pp. www.law.harvard.edu/ 1007-1032. programs/pifs/pdfs/ Dwyer, P. D., & Roberts, R. W. (2004) rachel_carnachan.pdf "The Contemporary GenderCarter, D. A., B. J. Simkins, & Simpson, Agenda of the US Public Ac- W. G. (2003) “Corporate gov- counting Profession: Embracing ernance, board diversity and Feminism or Maintaining Em- firm value”, The Financial Re- pire?" Critical Perspectives on view, Vol. 38, pp. 33 - 53. Accounting, Vol. 15, No.1, pp.Chand, P., & White, M. (2007) "A Cri- 159-177. tique of the Influence of Global- EFRAG (2006) "EU Financial Report- ization and Convergence of Ac- ing", http://www.rjnet.nl/pdf/ counting Standards in Fiji Star, H a n d o u t s % Open", Critical Perspectives on 20Enevoldsen.ppt#380,29,Slide Accounting, Vol. 18, No.5, pp. 29 605-622. Everett, J., Neu, D., & Rahaman, A. S.Charlemagne (2007) Money-go-round. (2007) "Accounting and the Retrieved Aug. 11th. 2007, from Global Fight against Corrup- http://www.economist.com/ tion", Accounting, Organiza- world/europe/displaystory.cfm? tions and Society, Vol. 32, No.6, story_id=9556349 pp. 513-542.Chua, W. F., & Poullaos, C. (1994) Gallhofer, S. (1998) "The Silences of "Rethinking the Profession-state Mainstream Feminist Account- Dynamic: The Victorian Char- ing Research", Critical Per- tered Attempt", Accounting Or- spectives on Accounting, Vol. 9, ganizations and Society, Vol. No.3, pp. 355-375. 18, No.7/8, pp. 691-728. _________, Haslam, J., Monk, E. &________ & ________ (1998) "The Dy- Roberts, C. (2006a) "The eman- namics of “Closure” amidst the cipatory potential of online re- Construction of Market, Profes- porting" Accounting, Auditing & sion, Empire and Nationhood: A Accountability Journal, Vol. 19, Historical Analysis of an Aus- No. 5, pp. 681-718. tralian Accounting Association, _________, ________, _______ & 1886-1903", Accounting Or- ______ (2006b) "Response to
  13. 13. A. Brown / Issues in Social and Environmental Accounting 1 (2008) 89-103 101 Prem Sikkas reflections on the About+Us/About+the+ internet and possibilities for Foundation/Annual+Reports.htm counter accounts", Accounting, ______ (2007a) About us. Retrieved Auditing & Accountability Jour- Aug. 11th. 2007, from http:// nal, Vol. 19, No. 5, pp. 770-773. www.iasb.org/About+Us/Graham, C., & Neu, D. (2003) about+Us.htm "Accounting for Globalization", ______ (2007b) Convergence of Ac- Accounting Forum, Vol. 27, counting in Emerging and Tran- No.4, pp. 449-471. sition Economies. RetrievedHiggs, D. (2003) Review of the Role and Aug. 11th. 2007, from http:// Effectiveness of Non-executive www.iasb.org/News/ Directors. Dept. of Trade and Press+Releases/Convergence Industry, of+accounting+in+emergingHopper, T., & Hoque, Z. (2004) Ac- +and+transition+economies.htm counting and Accountability ______ (2007c) XBRL News, from within Emerging Economies. http://www.iasb.org/xbrl/ Amsterdam: Elservier index.htmlHopwood, A. G. (1987) "Accounting IASC (1999) Business reporting on the and Gender: An Introduction", internet: A report prepared for Accounting, Organizations and the International Accounting Society, Vol. 12, No.1, pp. 65- Standards Committee: Interna- 69. tional Accounting StandardsIAS Plus (2005) The Framework for the Committee. Retrieved Aug. Preparation and Presentation of 11th, 2007 Financial Statements. Retrieved IASCF Constitution (2007) Interna- Aug. 11th. 2007, from http:// tional Accounting Standards www.iasplus.com/standard/ Committee Foundation (IASCF) framework.htm Constitution. Retrieved Aug.IASB (2001) IASB Annual Report 2001, 11th. 2007, from http:// from http://www.iasb.org/ www.iasb.org/About+Us/ About+Us/about+the+ Founda- About+the+Foundation/ tion/Annual+Reports.htm Constitution.htm______ (2002) IASB Annual Report Ibrahim, N. A. & Angelidis, J. P. (1994) 2002, from http://www.iasb.org/ “Effect of board members gen- About+Us/About+the+ Founda- der on corporate social respon- tion/Annual+Reports.htm siveness orientation”, Journal______ (2003) IASB Annual Report of Applied Business Research, 2003, from http://www.iasb.org/ Vol. 10, No. 1, pp. 35-41. About+Us/About+the+ Founda- ITU (2007, Aug. 11th, 2007) Network tion/Annual+Reports.htm wizards, RIPE: ITU, from______ (2004) IASB Annual Report http://www.itu.int/ITU-D/ict/ 2004, from http://www.iasb.org/ statistics/at_glance/ About+Us/About+the+ Founda- Internet05.pdf tion/Annual+Reports.htm Kedslie, M. J. M. (1990) "Mutual Self______ (2005) IASB Annual Report Interest: Unifying Force: The 2005, from http://www.iasb.org/ Dominance of Societal Closure
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  15. 15. A. Brown / Issues in Social and Environmental Accounting 1 (2008) 89-103 103 Journal of International Ac- Retrieved Aug. 11th. 2007, from counting, Auditing and Taxa- http://devdata.worldbank.org/ tion, Vol. 15 No. 1, pp. 109-126. data-query/Swaminathan, M. S. (2001) "Antyodaya _________ (2002) Data and Statistics. Pathway of Bridging the Digital Retrieved Aug. 11th. 2007, from Divide", Lecture delivered be- http://devdata.worldbank.org/ fore the Tilak Smarak Trust, data-query/ Pune, India, August, Vol. 1, pp. _________ (2003) Data and statistics. 2001. Retrieved Aug. 11th. 2007, fromUnerman, J., & Bennett, M. (2004) http://www.worldbank.org/data/ "Increased Stakeholder Dialogue c o u n t r y c l a s s / and the Internet: towards classgroups.htm#Low_income Greater Corporate Accountabil- _________ (2004) Data and Statistics. ity or Reinforcing Capitalist He- Retrieved Aug. 11th. 2007, from gemony?" Accounting, Organi- http://devdata.worldbank.org/ zations and Society, Vol. 29, data-query/ No.7, pp. 685-707. _________ (2005. Data and Statistics.United Nations (2007) UN Millenium Retrieved Aug. 11th. 2007, from Development Goals. Retrieved http://devdata.worldbank.org/ Aug. 11th, 2007, from http:// data-query/ www.un.org/millenniumgoals/. _________ (2007) Data and statistics,Walker, S. P. (1995) "The Genesis of f r o m h t t p : / / Professional Formation in Scot- devdata.worldbank.org/data- land: A Contextual Analysis". query/ Accounting, Organizations and Zarb, B. J. (2006) The Quest for Trans- Society, Vol. 20, No.5, pp. 285- parency in Financial Reporting: 310. Should International ReportingWarschauer, M. (2002) Standards Replace U.S. "Reconceptualizing the Digital G.A.A.P.?, The CPA Journal Divide", First Monday, Vol. 7, Online, http://www.nysscpa.org/ No.7, pp. 197-304. cpajournal/2006/906/essentials/Wilmott, H (1986) "Organising the Pro- p30.htm fession: a Theoretical and His- Zeghal, D., & Mhedhbi, K. (2006) "An torical Examination of the De- Analysis of the Factors Affect- velopment of the Major Ac- ing the Adoption of Interna- counting Bodies in the UK", tional Accounting Standards by Accounting, Organizations and Developing Countries", Interna- Society, Vol. 11, No.6, pp. 555- tional Journal of Accounting, 580. Vol. 41, No.4, pp. 373-386.World Bank (2001) Data and Statistics.
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