Triocracy and the dynamics of standard setting: A comparative study of FASB's deliberation process on SFAS No. 133 and SFAS No. 141.

摘要

This study examines the influence of socio-political and socio-economic factors in the formulation of accounting standards. The conflicts and controversies in accounting standard setting are a result of the historical and natural progression of business dynamics, diverse interest groups, and the underlying economic, social and political arrangements of the democratic process that have evolved over time to address these accounting and financial reporting policies. Ultimately it is the natural evolution of these controversies and the conflicting interest of various parties that form the rich context in which the dynamics of standard setting can be better understood; this in turn allows prediction of the acceptability and effectiveness of the standards eventually adopted. To that end this study first explores the three theories of regulation and how various forces tend to influence regulatory policy. This then becomes the framework for exploring how accounting is regulated. Based on the theory and hypotheses thus developed in this study, deliberation documents (comment letters, congressional records, SEC publications and other documents) on two FASB exposure drafts were thoroughly reviewed, analyzed (content analysis), and compared to document evidence of triocracy---the interaction of SEC, FASB, and Congress on the deliberation process of accounting standard setting. A comparison of SEC initiatives, FASB's positions on Exposure Drafts, Constituents' opposition on key issues, and the ensuing Congressional involvement indicates that the triocratic arrangement is intertwined in the dynamics of and in its influence on accounting standard setting. The difficulties that FASB encountered during the deliberations of SFAS 133 and 141/142 make it clear that the establishment of sound concepts is a necessary step, but that this is in no way sufficient, for successful standard setting. For the standard setting process to succeed it is essential that the recognition of how deeply politics is embedded in this process must be embraced by FASB and acted upon.