THE INFLUENCE OF CONSTITUENCY INPUT IN SETTING ACCOUNTING STANDARDS (FOREIGN CURRENCY TRANSLATION).

摘要

This study described and analyzed constituency input to the Financial Accounting Standards Board (FASB) in setting accounting standards. Foreign currency translation was the specific issue selected for detailed analysis.;The majority of corporate responses to the exposure drafts preceding Statement 52 supported the FASB's position on the translation method and the treatment of translation gain or loss. The majority of corporate responses to the first exposure draft preceding Statement 52 opposed the FASB's position on highly inflationary economies. The FASB changed its position in the revised exposure draft. The majority of responses to the revised exposure draft again opposed the FASB's position. The FASB changed to another position in Statement 52.;The corporate responses also were analyzed from different perspectives. The FASB did not form an opinion based on when the response was received and did not consistently align itself with the members of any industrial group. Larger corporations did not have more influence on the FASB's decision than smaller corporations.;No general agreement was found in responses from the Big 8 firms on any of the questions; therefore, it was concluded that the Big 8, as a group, did not exert any influence on the FASB's decisions. Overall, it did not appear that the Big 8 firms influenced their clients, or vice versa, in preparing responses.;Written responses to the exposure draft preceding Statement 8 and the two exposure drafts preceding Statement 52 from the corporate sector of the constituency and the eight largest public accounting firms (Big 8) were examined to determine the positions taken on three major questions; namely, the translation method, the treatment of translation gain or loss, and the treatment for highly inflationary economies.;This study also tested the type of influence tactics used by corporations in their responses. No noticeable differences were found in the use of influence tactics when the corporations were viewed from various perspectives.